U.S. Treasury Department Releases Model FATCA Intergovernmental Agreements

I. Introduction

On July 26, the U.S. Treasury Department released two model intergovernmental agreements that will provide residents of signatory countries with an alternative withholding and reporting regime to that imposed under the "Foreign Account Tax Compliance Act" ("FATCA") provisions contained in sections 1471 through 1474 of the Internal Revenue Code.¹ One model is " reciprocal"—that is, each country exchanges information with the other;² the other is " nonreciprocal"—that is, only the signatory country provides information. Simultaneously with the release of the model agreements, France, Germany, Italy, Spain, the United Kingdom, and the United States issued a joint statement endorsing the model agreements. Over forty other countries have been reported to be interested in entering into similar agreements with the United States, including Australia, Brazil, Canada, the Cayman Islands, Ireland, Luxembourg, the Netherlands, New Zealand, Japan, and Russia.