Treasury Continues to Build International Support for Combating Offshore Tax Evasion and Facilitating FATCA Implementation

The U.S. Treasury Department has announced that it is engaged in negotiations or discussions with more than 50 countries with respect to establishing Intergovernmental Agreements ("IGAs") for the Foreign Account Tax Compliance Act ("FATCA"). The Treasury previously published a Model IGA Agreement (Model 1), under which foreign financial institutions located in a foreign country would provide information with respect to accounts and investments owned directly or indirectly by U.S. persons to the local government for transmittal by such government to the United States. Treasury is also negotiating a Model 2 IGA for Japan and Switzerland, and possibly other countries which would require financial institutions in those jurisdictions to provide such information directly to the IRS.

The Treasury Department characterized the status of its negotiations with various countries in three broad groups. It also indicated that it is "finalizing" IGAs with a number of countries, including France, Germany, Japan, Switzerland, Canada, and Ireland, and hopes to conclude final agreements by year-end. It is "actively engaged" in discussions with other countries, such as Australia, Cayman Islands, New Zealand and Singapore, and hopes to conclude negotiations with several of these countries by year-end. The Treasury indicated that it has been "exploring options" for IGAs with a number of other jurisdictions, including Luxembourg, Bermuda, BVI, India and Russia, and remains open to considering IGAs with any country.

View Press Release in full here (links externally to Treasury website). Related news item: Treasury Department Releases Model 2 FATCA IGA; Treasury FATCA page.