Treasury Department Releases Model 2 FATCA IGA

The U.S. Treasury Department publicly released its Model 2 FATCA Intergovernmental Agreement ("IGA"). Under the terms of the Model 2 IGA, financial institutions located in jurisdictions that enter into a Model 2 form of IGA will be required, at the direction of the foreign government, to register directly with the IRS by January 1, 2014, and to report information with respect to U.S. accounts and with respect to accounts held by Nonparticipating Financial Institutions. Foreign governments entering into a Model 2 IGA would agree, upon request of the IRS, to obtain and exchange certain information with respect to certain U.S. accounts and accounts of Nonparticipating Financial Institutions. The IRS released a Model 1 IGA in July which would provide for reporting of information by foreign institutions to their local government, which would automatically transmit such information on to the IRS. At that time the IRS announced that it was developing a Model 2 IGA for use by Switzerland, Japan and other countries in which local laws prevented compliance with FATCA, or countries which preferred that financial institutions report directly to the IRS.

View Model 2 Agreement in full here (links externally to PDF).Related news item: Treasury Continues to Build International Support for Combating Offshore Tax Evasion and Facilitating FATCA Implementation.