On July 26, 2012, the U.S. Department of Treasury released its first model intergovernmental agreement (IGA) implementing the information reporting and withholding tax provisions under the Foreign Account Tax Compliance Act (FATCA). FATCA was enacted by Congress in 2010 in an effort to combat avoidance of U.S. tax by U.S. taxpayers through the use of foreign accounts. The IGA, developed in consultation with France, Germany, Italy, Spain, and the United Kingdom, facilitates the automatic exchange of foreign account information between the United States and the foreign country (FATCA Partner). This is now referred to as the Model I approach. Please see our Client Alert of March 5, 2012 here for a more detailed discussion of FATCA generally and the Model I approach.
It is expected that Treasury will release a second model IGA (Model II) in consultation with Japan and Switzerland in the near future. Please see our Client Alert of July 6, 2012 here for a more detailed discussion of the Model II approach.
Please see full alert below for more information.
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