US Treasury Issues Model Intergovernmental FATCA Agreement
by Mike Godfrey, Tax-News.com, Washington
27 July 2012
The United States Treasury Department has published a model intergovernmental agreement to implement the information reporting and withholding tax provisions of the Foreign Account Tax Compliance Act (FATCA), together with a joint communique with France, Germany, Italy, Spain and the United Kingdom endorsing its text.
See:
Addendum: Here is another report which includes links to the model agreements:
http://www.advisorone.com/2012/07/26/treasury-releases-model-agreement-for-foreign-tax
Perhaps I’m missing something here, but why would any country enter into a nonreciprocal agreement?
To partially answer my own question see below
That version (reciprocal) of the model agreement will be available only to jurisdictions
with whom the US has in effect an income tax treaty or tax information exchange
agreement and with respect to whom the Treasury Department and the IRS have
determined that the recipient government has in place robust protections and
practices to ensure that the information remains confidential and that it is
used solely for tax purposes.
A nonreciprocal agreement might be seen to be to the advantage of a country if the alternative is every FFI in the country having to negotiate separately with the US, possibly in violation of local laws.
On another point:
What are the consequences of a reciprocal agreement? Banks in (for example) the UK must report to their government on accounts held by US persons. On the other hand, First Bank of Wyoming (four offices in Cody, Lowell, and Powell, Wyoming), will have to report on accounts held by UK, France, Germany, Italy, Spain, (and presumably soon) Japan and Switzerland accounts. This is only the beginning. In the future, maybe they will have to report separately on scores of different nationalities…
Sounds like fun.