Italy Signs FATCA Intergovernmental Agreement with the United States

Italy and the United States announced that they signed an Intergovernmental Agreement ("IGA") under FATCA. The Agreement, is based on the Treasury's Model 1A (reciprocal) IGA, where Italian Financial Institutions report information with respect to accounts that are directly or indirectly held by U.S. persons to the Italian Government for automatic transmittal to the IRS. Annex II to the IGA differs significantly from the current Model Annex II that was posted on the Treasury website on November 4, 2013. Apparently, the IGA was initialed in January 2013, but final agreement was delayed while translations were developed. Annex II of the Italian IGA treats any fund or institution that qualifies as a retirement fund under Italian law, including pension funds regulated by Italian law, as exempt from FATCA, provided that the individual voluntary contributions to the account are either limited by Italian law or do not exceed 50,000 Euros in any year. Annex II treats as "deemed-compliant" any non-profit organization registered as "Onlus" in the register held by the Italian Revenue Agency, pursuant to Article 11 of the Legislative Decree N. 460/1997.

Italy was one of the initial five European countries that agreed in February 2012 to develop an intergovernmental agreement with the United States to implement FATCA and is the last of such countries to finalize its IGA.

See: Italy IGA.See generally: Cabinet FATCA Materials.For more information, please contact Daniel Mulcahy or Mark Howe.