The US Department of Treasury has announced that Cyprus and the
US have reached agreement in substance as regards the
Inter-Governmental Agreement for FATCA and Cyprus has consented to
being included on Treasury's list of Model 1 jurisdictions.
The IGA, which implements the tax reporting and withholding
procedures commonly associated with FATCA, is expected to be
reciprocal in nature and contain the much coveted 'most
favoured nation' provision. As such the final text is likely to
be similar to the Model 1 IGA between the UK and the US.
Cyprus has been party to a double-taxation treaty with the US
for a number of years. The treaty was entered into in 1984 and the
efficacy of its tax provisions was recently reaffirmed in a recent
internal memorandum by the US IRS (number 201343019 of 25 October
2013), in which a Cyprus company was deemed a 'qualified
foreign corporation' enabling dividends received by US
individuals from Cyprus companies to be eligible for reduced
