On July 26, 2012, the U.S. Treasury Department (“Treasury”) released two model agreements that reflect the intergovernmental approach outlined in Treasury’s February joint statement with France, Germany, Italy, Spain, and the United Kingdom as an alternative to complying with the Foreign Account Tax Compliance Act (“FATCA”).
The model agreements would be entered into between the U.S. and other countries (“FATCA Partners”) and establish a framework for foreign financial institutions (“FFI”) to report certain account information (as required under FATCA) to the relevant tax authorities of the FATCA Partner. Each model agreement contains an annex describing due diligence obligations for identifying and reporting on U.S. accounts and on payments to certain non-participating financial institutions. Once the necessary information is obtained, the FATCA Partner will transmit such information automatically to the Internal Revenue Service (“IRS”) under either existing bilateral tax treaties or tax information exchange agreements. Since, as provided under the model agreements, the FATCA Partners will require their financial institutions to participate and obtain information as required under FATCA, such financial institutions will generally be treated as participating FFIs and therefore not subject to FATCA withholding.
Please see full alert below for more information.
Firefox recommends the PDF Plugin for Mac OS X for viewing PDF documents in your browser.
We can also show you Legal Updates using the Google Viewer; however, you will need to be logged into Google Docs to view them.
Please choose one of the above to proceed!
LOADING PDF: If there are any problems, click here to download the file.