Foreign Account Tax Compliance Act (FATCA) was enacted in 2010 by Congress to target non-compliance by U.S. taxpayers using foreign accounts. FATCA requires foreign financial institutions (FFIs) to report to the IRS information about financial accounts held by U.S. taxpayers, or by foreign entities in which U.S. taxpayers hold a substantial ownership interest.
In order to effectively implement FATCA requirements, the United States have worked with foreign governments to develop two types of Intergovernmental Agreements (IGAs). All IGAs envision that a partner foreign government will require all of its financial institutions (FFIs) to identify U.S. accounts and account holders, and report information about U.S. accounts to the IRS.
There are two types of IGAs. Under Model 1 IGA, foreign financial institutions conduct due diligence and identify U.S. accounts. FFIs report information about their U.S. accounts to their government, and this partner jurisdiction, in turn, reports such information to the IRS on an automatic basis. Pursuant to Model 2 IGA, the partner jurisdiction agrees to direct and enable all its FFIs located in the jurisdiction to report specified information about their U.S. accounts directly to the IRS.
U.S. Department of Treasury publishes a list of all the countries that have an executed IGA in effect:
| Model 1 IGA | Model 2 IGA |
| • Algeria (10-13-2015) • Australia (4-28-2014) • Bahamas (11-3-2014) • Barbados (11-17-2014) • Belarus (3-18-2015) • Belgium (4-23-2014) • Brazil (9-23-2014) • British Virgin Islands (6-30-2014) • Bulgaria (12-5-2014) • Cambodia (9-14-2015) • Canada (2-5-2014) • Cayman Islands (11-29-2013) • Colombia (5-20-2015) • Costa Rica (11-26-2013) • Croatia (3-20-2015) • Curaçao (12-16-2014) • Cyprus (12-2-2014) • Czech Republic (8-4-2014) • Denmark (11-19-2012) • Estonia (4-11-2014) • Finland (3-5-2014) • France (11-14-2013) • Georgia (7-10-2015) • Germany (5-31-2013) • Gibraltar (5-8-2014) • Guernsey (12-13-2013) • Holy See (6-10-2015) • Honduras (3-31-2014) • Hungary (2-4-2014) • Iceland (5-26-2015) • India (7-9-2015) • Ireland (1-23-2013) • Isle of Man (12-13-2013) • Israel (6-30-2014) • Italy (1-10-2014) • Jamaica (5-1-2014) • Jersey (12-13-2013) • Kosovo (2-26-2015) • Kuwait (4-29-2015) • Latvia (6-27-2014) • Liechtenstein (5-19-2014) • Lithuania (8-26-2014) • Luxembourg (3-28-2014) • Malta (12-16-2013) • Mauritius (12-27-2013) • Mexico (4-9-2014) • Montserrat (9-8-2015) • Netherlands (12-18-2013) • New Zealand (6-12-2014) • Norway (4-15-2013) • Philippines (7-13-2015) • Poland (10-7-2014) • Portugal (8-6-2015) • Qatar (1-7-2015) • Romania (5-28-2015) • St. Kitts and Nevis (8-31-2015) • St. Vincent and the Grenadines (8-18-2015) • Singapore (12-9-2014) • Slovak Republic (7-31-2015) • Slovenia (6-2-2014) • Spain (5-14-2013) • South Africa (6-9-2014) • South Korea (6-10-2015) • Sweden (8-8-2014) • Turkey (7-29-2015) • Turks and Caicos Islands (12-1-2014) • United Arab Emirates (6-17-2015) • United Kingdom (9-12-2012) • Uzbekistan (4-3-2015) | • Austria (4-29-2014) • Bermuda (12-19-2013) • Chile (3-5-2014) • Hong Kong (11-13-2014) • Japan (6-11-2013) • Moldova (11-26-2014) • San Marino (10-28-2015) • Switzerland (2-14-2013) |
In addition, the following jurisdictions have reached agreements with the U.S. in substance and have agreed to be included on the Treasury Department list:
| Model 1 IGA | Model 2 IGA |
| • Anguilla (6-30-2014) • Antigua and Barbuda (6-3-2014) • Azerbaijan (5-16-2014) • Bahrain (6-30-2014) • Cabo Verde (6-30-2014) • China (6-26-2014) • Dominica (6-19-2014) • Dominican Republic (6-30-2014) • Greece (11-30-2014) • Greenland (6-29-2014) • Grenada (6-16-2014) • Guyana (6-24-2014) • Haiti (6-30-2014) • Indonesia (5-4-2014) • Kazakhstan (11-30-2014) • Malaysia (6-30-2014) • Montenegro (6-30-2014) • Panama (5-1-2014) • Peru (5-1-2014) • St. Lucia (6-12-2014) • Saudi Arabia (6-24-2014) • Serbia (6-30-2014) • Seychelles (5-28-2014) • Thailand (6-24-2014) • Trinidad and Tobago (11-30-2014) • Tunisia (11-30-2014) • Turkmenistan (6-3-2014) • Ukraine (6-26-2014) | • Armenia (5-8-2014) • Iraq (6-30-2014) • Macao (11-30-2014) • Nicaragua (6-30-2014) • Paraguay (6-6-2014) • Taiwan (6-23-2014)* |
U.S. taxpayers with financial accounts located in these jurisdictions should expect that their identity and account information may be disclosed to the IRS, and should be mindful of the U.S. tax obligations, including a requirement to report foreign accounts on a special return (FBAR) and report all their world-wide income, including interest or investment income from foreign accounts, on their income tax returns.
Former IRS Attorneys at Holtz, Slavett & Drabkin have substantial experience assisting taxpayers with foreign accounts and assets to get into compliance with the U.S. tax laws. To schedule a consultation, please call us at (310) 550-6200.