• Service: Financial Services
  • Industry: Banking
  • Type: Regulatory update
  • Date: 11/27/2012

Impacts of IGAs 

In November 2012, the U.S. Treasury Department released the Model II Intergovernmental Agreeement for the implementation of the reporting and withholding tax provisions of the Foreign Account Tax Compliance Act (FATCA) for Switzerland and Japan.
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In July 2012, two versions of the Model I were presented, namely one which is based on reciprocity and one without reciprocity. The mentioned reciprocal treatment finds expression in the form of an exchange of information about accounts of the respective nationals. The framework of the newly released model requires foreign financial institutions in Japan and Switzerland to report U.S. account information directly to the IRS. More detailed information about the major distinctions between the Models I and II, as well as the rules from the FATCA regulation are apparent in the factsheet.

FATCA Competence Center

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FATCA was adopted by the U.S. congress as part of the HIRE Act on 10 March 2010. FATCA follows the guidelines of the “US Stop Tax Haven Abuse Act 2009” and aims primarily at preventing tax evasion by U.S. persons.