FATCA: The Ireland - US Intergovernmental Agreement

Following an announcement in early December 2012 by the Irish Minister for Finance, Michael Noonan, that negotiations with the US regarding an intergovernmental agreement between Ireland and the US to facilitate the implementation of the US Foreign Account Tax Compliance Act ("FATCA") had been successfully concluded, the relevant agreement (the "Irish IGA") was signed on 21 December 2012.

The Irish IGA closely follows the Model I form of intergovernmental agreement, as initially released by the US Treasury in late July 2012. This form of agreement provides for reciprocal information exchange between the relevant countries and enables financial institutions in Ireland, in this case, to comply with FATCA by collecting and providing the required information directly to the Irish Revenue (rather than to the IRS). Compliance will enable financial institutions to thereby avoid the potential requirement for withholding tax to be levied on US sourced payments to them.