Under IGAs, financial institutions would communicate information to their respective tax authorities regarding financial accounts maintained by their residents, and then this information will be automatically exchanged between the tax authorities using a standardized procedure.
Also, the Economic and Financial Affairs Council of the European Union announced its support for automatic tax information exchange programs, similar to the FATCA regime.
According to a May 2013 release (Spanish) [PDF 64 KB], the Spanish finance minister (Ministro de Hacienda y Administraciones Públicas) and U.S. ambassador on May 14 signed an agreement based on an intergovernmental model agreement (IGA) issued by the United States in July 2012 and endorsed by Spain and four other European countries (France, Germany, Italy, and the United Kingdom).
Read text of the IGA with Spain [PDF 174 KB].
The Inland Revenue Authority of Singapore issued a May 14 release announcing an intention to conclude an IGA with the United States to facilitate compliance with FATCA by financial institutions in Singapore.
The IGA would be in the form of the Model 1 IGA, which will allow for information to be exchanged between the Singapore and U.S. tax agencies, and thus help ease the compliance burden of financial institutions in Singapore with FATCA.
EU support for FATCA
The EU council met on May 14, 2013, and released a statement [PDF 94 KB] noting that:
- EU Member States are negotiating inter-governmental agreements with third countries to exchange a large scope of information on an automatic basis.
- France, Germany, Italy, Spain, and the UK have agreed to work on a pilot multilateral exchange facility using the model agreed with the United States as the basis for this multilateral exchange, with the aim of contributing to the creation of a new global standard.
- British Overseas Territories and the Isle of Man have committed to joining the pilot initiative, and Guernsey has expressed “strong interest.”
For more information, contact a tax professional with KPMG LLP: