Finland has signed a Model 1 IGA, meaning it will exchange information annually on a reciprocal basis with the US. To avoid paying a withholding tax of 30%, Finnish financial institutions will be FATCA compliant if they transmit relevant information about payments to their US account holders to the Finnish tax authorities, who will forward this information to the Treasury and Internal Revenue Service.
Chile also signed an IGA on March 5, but of the Model 2 variety, which means, to avoid paying the same withholding tax of 30%, its financial institutions with US account holders will have to register with the American authorities by July 1 this year and enter into an FFI [foreign financial institutions] Agreement to become FATCA compliant. Model 2 IGAs require non-reciprocal exchange of information.
Since the UK became the first to do so on September 9 2012, 20 jurisdictions have signed Model 1 IGAs with the US.
UK – signed September 9 2012 |
Guernsey – December 13 2013 |
Mexico – November 19 2012 |
Isle of Man – December 13 2013 |
Denmark – November 19 2012 |
Jersey – December 13 2013 |
Ireland – January 23 2013 |
Malta – December 16 2013 |
Norway – April 15 2013 |
Netherlands – December 18 2013 |
Spain – May 14 2013 |
Mauritius – December 27 2013 |
Germany – May 31 2013 |
Italy – January 10 2014 |
France – November 14 2013 |
Hungary – February 4 2014 |
Denmark – November 19 2013 |
Canada- February 5 2014 |
Costa Rica – November 26 2013 |
Finland – March 5 2014 |
Cayman Islands – November 29 2013 |
Four jurisdictions have signed Model 2 IGAs since Switzerland became the first one to do so on February 14 last year.
Switzerland – signed February 14 2013 |
Bermuda- December 19 2013 |
Japan – June 11 2013 |
Chile – March 5 2014 |
Intergovernmental agreements were unveiled in July 2012 as the instrument for implementing FATCA to overcome any local legal restrictions on reporting directly to a foreign jurisdiction, that is, the US, which was the original intention in the legislation. Progress on signing them, however, has been slow. The Treasury announced in November 2012 that it was in IGA negotiations with more than 50 jurisdictions. Sixteen months later it has signed less than half that number.