At a glance
On December 21, 2012, the Chargé d’affaires at the US Embassy in Ireland and the Minister for Finance of Ireland signed an intergovernmental agreement (the US-Ireland IGA).
In March 2010, the US enacted the Hiring Incentives to Restore Employment Act. This act incorporated the information reporting provisions known as the Foreign Account Tax Compliance Act (“FATCA”). FATCA is a response by the US tax authorities to the perception that US individuals are not reporting all of their income earned outside the US. The detailed requirements under FATCA are set out in the final regulations released by the US Department of the Treasury in January 2013. The FATCA provisions generally require non-US financial institutions to enter into a legally binding agreement with the Internal Revenue Service (IRS) (under US law) to identify any US investors or account holders and report certain details to the IRS. Failure to enter into or to abide by the terms of such an agreement would result in the operation of a 30% withholding tax on relevant payments received by that financial institution from sources within the US.
On December 21, 2012, the Chargé d’affaires at the US Embassy in Ireland and the Minister for Finance of Ireland signed an intergovernmental agreement (the US-Ireland IGA), for which enabling provisions are due to be enacted into Irish tax legislation in the coming months. The IGA changes the way in which FATCA affects Irish financial institutions. Its effect is to give Irish laws and regulations precedence in governing FATCA compliance for Irish entities and it provides that reporting will be carried out to the Irish Revenue Commissioners, rather than to the IRS. The reporting requirements will apply to all Irish financial institutions, as defined, regardless of whether the entity has US account holders or US assets.