The US Treasury Department announced on Thursday that the United States has signed six more bilateral agreements to implement the reporting and withholding provisions of the US Foreign Account Tax Compliance Act (FATCA). The agreements with the Netherlands, Malta, Bermuda, Jersey, Guernsey and the Isle of Man bring the number of signed FATCA intergovernmental agreements to 18.
FATCA is a US law that requires foreign financial institutions (FFIs) to report to the Internal Revenue Service (IRS), the US tax agency, information about financial accounts held by US taxpayers or by foreign entities in which US taxpayers hold a substantial interest.
The Netherlands, Malta, Jersey, Guernsey and the Isle of Man each signed what are known as Model 1A agreements, under which FFIs report information about US accounts to their home governments. Those governments then report the information to the IRS. These agreements are reciprocal, meaning that the US government will provide similar tax information to these governments regarding individuals and entities from their jurisdictions with accounts in the United States.
Bermuda signed a Model 2 agreement, under which Bermudan FFIs will register with the IRS and report the information required by FATCA directly to the IRS.
—Alistair Nevius (anevius@aicpa.org) is editor-in-chief, tax for CGMA Magazine.
