Treasury updates, revises model intergovernmental agreements (IGAs)
20 August 2013: The U.S. Treasury Department posted revised versions of the FATCA model intergovernmental agreements (IGAs) concurrent with the launch of the IRS’s FATCA registration portal.
The revised model IGAs are posted on the Treasury FATCA webpage (with a posting date of 19 August 2013) and contain additional footnotes and/or modifications to previous footnotes.
It appears that Treasury is attempting to clarify certain items with the new and/or revised footnotes. For example, new footnote 1 makes clear that an exchange of information instrument must be in force if referenced as the legal basis for the exchange of information pursuant to the IGA. The footnote further clarifies that when a country does not have an income tax treaty (convention) or tax information exchange agreement with the United States currently in effect, “…only the Convention on Mutual Administrative Assistance in Tax Matters done at Strasbourg on 25 January 1988 is currently in force in the United States.”
Cayman Islands - FATCA agreement with United States
Representatives of the governments of the Cayman Islands and the United States in August 2013 concluded negotiations and initialed a Model 1 intergovernmental agreement (IGA), and a new tax information exchange agreement.
The agreements pave the way for automatic exchange of information under the U.S. Foreign Account Tax Compliance Act (FATCA) provisions.
Official signing of the agreements will be held as soon as possible, after which the texts will be publicly available.
As reported in a Cayman Island release, the Model 1 IGA will provide a streamline process for foreign financial institutions in the Cayman Islands to report information regarding accounts and non-financial entities substantially owned by U.S. citizens and residents. The Cayman Islands government will then relay the information to the U.S. Internal Revenue Service.
The agreements also allow a standard mechanism for reporting to the Caymans' Tax Information Authority, which will be the sole channel in the Cayman Islands for providing tax-related information to other governments.
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