Intergovernmental agreement (IGA) monitor

The expected wave of intergovernmental agreements (IGAs) implementing the tax reporting and withholding procedures commonly associated with the Foreign Account Tax Compliance Act (FATCA) has begun. This is not surprising considering the recent US Department of Treasury announcement that it is engaged with more than 50 countries and jurisdictions around the world to improve international tax compliance and implement FATCA.

Feel free to click any of the countries below to see the latest development as you consider some of the following actions to think about:

IGA Countries

Argentina
Australia
Bahamas
Bahrain
Barbados
Belgium
Bermuda
Brazil
British Virgin Islands
Canada
 
Cayman Islands
Chile
Costa Rica
Curacao
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
 
Germany
Gibraltar
Guernsey
Hungary
India
Ireland
Isle of Man
Israel
Italy
Jamaica
Japan
Jersey
Korea
Lebanon
Liechtenstein
Luxembourg
Malaysia
Malta
Mauritius
Mexico
Netherlands
New Zealand
Norway
Poland
Romania
Russia
Seychelles
Singapore
St. Maarten
Slovak Republic
Slovenia
South Africa
Spain
Sweden
Switzerland
Taiwan
Trinidad and Tobago
United Kingdom

Model agreements

The US Treasury has released Model agreements to implement FATCA. These agreements serve as a baseline for negotiations between the US and FATCA partner countries. They continue to be updated as additional IGAs are promulgated. Please click here for the US Treasury website showing the latest agreements.

Actions to think about

Consider the whole picture
The chart provides an overview of the status of a number of IGAs. Practically speaking, this should be viewed as a first step towards implementation of the US FATCA regime in the partner jurisdiction and each country's approach will be different as to what subsequent actions may occur. For example, domestic legislation may be needed in many jurisdictions to effectuate the agreement. Moreover, countries will need to enact legislation or issue guidance to implement changes to the various processes that financial institutions in that jurisdiction utilize, including account opening, customer onboarding, customer due diligence, documentation, tax reporting, and withholding.

Stakeholders will need to wait until other guidance or legislation is enacted to have a full picture of what tasks, processes, and system changes may need to be implemented. Notwithstanding, preparatory actions should be occurring now.

For US purposes, the US Department of the Treasury has provided a page on their website to list those IGAs that they will treat as being 'in effect' (click here for link.)

Rethink planning and solutions
What impact will the IGAs have on a stakeholder's project planning and solutions design? To the extent possible, the concepts under the IGA framework should be incorporated. If plans were in place based on the proposed FATCA regulations, new strategies should be formed for FFIs in countries covered under an IGA. Plans to manage local law restrictions should also be revised. Operational processes and information technology systems will likely need to change.

Analyze the clauses in all IGAs
Many of the IGAs are expected to contain a 'most favored nation' clause which provides that any more favorable terms negotiated under another country’s IGA may be applied (excluding Annex II provisions). This unique concept is not one used in US income tax treaties and it is not clear how and when it will be invoked. Stakeholders should review the clauses in all IGAs that are released to consider whether a ‘most favored nation’ clause could apply.

Help shape the rules
Financial institutions should closely monitor their country's plan to release local guidance. Is there an opportunity to help shape them by providing input and suggestions to the foreign government?

Quantify potential costs
Companies should also consider broadly quantifying the cost of complying with FATCA and the IGAs, taking into account time and resources. For example, the UK tax authorities requested this information in September 2012 as part of their public consultation on guidance implementing the US/UK IGA. Other jurisdictions may also want to mirror this gathering of data as it may also be used for budgeting purposes.

IGA Monitor key – 5 general status categories

  • Agreement signed and released
  • Agreement signed or initialed but text not officially released
  • Final negotiations underway
  • Actively engaged in a dialogue
  • Working to explore options

*Note that only official written announcements are reflected – verbal comments by government officials or others are not.

Country Type of IGA Date signed Observation
argentina
Argentina
    Actively engaged in a dialogue
The US Treasury announced on November 8, 2012 that the US and Argentina were actively engaged in a dialogue towards concluding an IGA. No further information has been provided. See announcement by US Treasury on November 8, 2012.
australia
Australia
    Actively engaged in a dialogue
On November 7, 2012, the Treasurer announced that Australia had begun negotiations for an IGA with the United States.  The US Treasury announced on November 8, 2012 that the US and Australia were actively engaged in a dialogue towards concluding an IGA. No further information has been provided. See announcement by US Treasury on November 8, 2012. See the US Treasury FATCA update website.
bahamas
Bahamas
    Final negotiations underway
On August 12, 2013, the Ministry of Financial Services announced that the Bahamas will negotiate and enter into a Model 1 IGA with the US Treasury to implement FATCA.
bahrain
Bahrain
    Working to explore options
On August 29, 2013, the Governor of the Central Bank of Bahrain (CBB) sent a letter to the Chief Executive Officers and Compliance Officers of all CBB licensees informing them that the government of the Kingdom of Bahrain has decided to pursue a Model 1 IGA.
barbados
Barbados
    Actively engaged in a dialogue
On February 3, 2014, the Barbados Ministry of International Business announced that the Governments of Barbados and the United States have agreed to commence negotiations with respect to an IGA.
belgium
Belgium
    Actively engaged in a dialogue
On July 9, 2013, the Belgian Ministry of Finance issued a statement asserting its commitment to enter into an IGA. According to the statement, Belgium is in ongoing discussions with the United States towards a Model 1 IGA and Annex II which is under development. This follows a November 8, 2012 report by the US Treasury that the US and Belgium were actively engaged in a dialogue towards concluding an IGA. See announcement by US Treasury on November 8, 2012.
bermuda
Bermuda
Model 2 2013-12-19 Agreement signed and released
On December  19, 2013, the US Treasury announced that the United States signed an IGA with Bermuda to implement FATCA.  The US-Bermuda IGA substantially follows the Model 2 Agreement as of November 4, 2013 whereby financial institutions in Bermuda will report directly to the IRS.
brazil
Brazil
    Working to explore options
The US Treasury reported on November 8, 2012 that the US and Brazil were working to explore options for intergovernmental engagement. See announcement by US Treasury on November 8, 2012.
the_british_virgin_islands
British Virgin Islands
    Agreement signed or initialed but text not officially released
On March 14, 2014, the Premier of the British Virgin Islands (BVI) announced that the government had initialled an IGA which it expects to sign within the coming weeks. This announcement follows an August 20, 2013 announcement that the BVI had decided to negotiate an IGA with the United States and a November 8, 2012 announcement by the US Treasury that the United States and the BVI were actively engaged in a dialogue towards concluding an IGA.
canada
Canada
Model IA (Reciprocal) 2014-02-05 Agreement signed and released
The US Treasury announced in a February 5, 2014 press release that the United States and Canada had signed an IGA to implement FATCA. The Canadian Department of Finance made a similar announcement noting that corresponding draft legislation will be released for comment shortly.  This follows a November 8, 2012 announcement by the US Treasury and the Canadian Department of Finance that they were in the process of negotiating an IGA.

Please click here for more information.

 
the_cayman_islands
Cayman Islands
Model 1B (Non-Reciprocal) 2013-11-29 Agreement signed and released
On November 29, 2013, the US Treasury announced that the United States signed an IGA with the Cayman Islands to implement FATCA.  The US-Cayman Islands IGA substantially follows the Model 1B Agreement as of November 4, 2013 where an existing tax information and exchange agreement (TIEA) or double tax convention (DTC) is in place.  The release of this signed agreement follows an announcement on August 13, 2013 that an IGA had been initialled, the text of which was not released at that time.  The US and Cayman Islands government have been actively engaged in a dialogue to conclude an IGA since 2012.  See US Treasury announcement on November 8, 2012 and an announcement by the Cayman Island government on May 15, 2013 regarding the status of this dialogue.
chile
Chile
Model 2 2014-03-05 Agreement signed and released
The US Treasury released the text of the new Chile/US IGA. This IGA is substantially similar to the Model 2 Agreement (version dated November 4, 2013 in which a TIEA or DTC is in place), although a few differences exist such as certain IRS reporting due dates. Note that this IGA refers to the Chile/US DTC “upon its entry into force”.

The release follows a prior announcement from the Chilean Ministry of Finance that an IGA with the US would be signed in February of 2014. The Chilean government previously announced that it was negotiating with the US Treasury to achieve an IGA during a meeting of Chile’s Financial Stability Committee on July 2, 2013. Chile was on the US Treasury’s report on November 8, 2012 that the two jurisdictions were working to explore IGA options.
costa rica
Costa Rica
Model 1A (Reciprocal) 2013-11-26 Agreement signed and released
The US Treasury announced that the United States signed an IGA with Costa Rica on November 26, 2013.  The US-Costa Rica IGA is substantially similar to the Model 1A Agreement as of November 4, 2013 that includes a reciprocal approach for the sharing of information between the two governments.
curacao
Curacao
    Working to explore options
The Curacao Minister of Finance announced that on May 14, 2013 the Government of Curacao began negotiations with the United States to enter into a Model 1 IGA.
cyprus
Cyprus
    Actively engaged in a dialogue
The US Treasury announced on November 8, 2012 that the US and Cyprus were actively engaged in a dialogue towards concluding an IGA. No further information has been provided. See announcement by US Treasury on November 8, 2012.
the_czech_republic
Czech Republic
    Working to explore options
On February 8, 2013, the Czech Ministry of Finance announced the government’s decision to pursue a Model 1 IGA.  This follows a November 8, 2012 report by the US Treasury that the US and the Czech Republic were actively engaged in a dialogue towards concluding an IGA. See announcement by US Treasury on November 8, 2012.
denmark
Denmark
Model IA (Reciprocal) 2012-11-19 Agreement signed and released
The US-Denmark IGA is substantially similar to the Model 1A IGA as of November 2012.
 
estonia
Estonia
    Actively engaged in a dialogue
The US Treasury announced on November 8, 2012 that the US and Estonia were actively engaged in a dialogue towards concluding an IGA. No further information has been provided. See announcement by US Treasury on November 8, 2012.
finland
Finland
Model IA (Reciprocal) 2014-03-05 Agreement signed and released
The US Treasury released the text of the new Finland/US IGA, which is substantially similar to the Reciprocal Model 1A Agreement (version date November 4, 2013).  On April 29, 2013, the Minister of Finance had announced that Finland was in the process of negotiating an IGA with the United States. This followed the US Treasury announcement on November 8, 2012 that US and Finland were in the process of finalizing an IGA and had hoped to conclude negotiations by the year end of 2012.
france
France
Model 1A (Reciprocal) 2013-11-14 Agreement signed and released
On November 14, 2013, the US Treasury announced that the United States had signed an IGA with France to implement FATCA.  The US-France IGA is substantially similar to the Model 1A IGA as of November 4, 2013.

Please click here for more information.

 
germany
Germany
Model 1A (Reciprocal) 2013-05-31 Agreement signed and released
The US-German IGA is substantially similar to the Model 1A IGA as of November 2012. The IGA was accompanied by a brief Declaration of Understanding providing some additional information.
gibraltar
Gibraltar
    Working to explore options
The US Treasury reported on November 8, 2012 that the US and Gibralter were working to explore options for intergovernmental engagement. See announcement by US Treasury on November 8, 2012.
guernsey
Guernsey
Model 1A (Reciprocal) 2013-12-13 Agreement signed and released
The US Treasury announced and the States of Guernsey government announced that the governments signed an IGA on December 13, 2013.  The US-Guernsey IGA is substantially similar to the Model 1A Agreement as of November 4, 2013 that includes a reciprocal approach for the sharing of information between the two governments.
hungary
Hungary
Model IA (Reciprocal) 2014-02-04 Agreement signed and released
The US Treasury announced in a February 5, 2014 press release that the United States and Hungary had signed an IGA to implement FATCA. The US Embassy in Budapest made a similar announcement. This follows an October 28, 2013 announcement by the Hungarian Ministry of National Economics that Hungary and the United States had initialed a Model 1 IGA to implement FATCA.
india
India
    Working to explore options
The US Treasury reported on November 8, 2012 that the US and India were working to explore options for intergovernmental engagement. See announcement by US Treasury on November 8, 2012.
ireland
Ireland
Model IA (Reciprocal) 2013-01-23 Agreement signed and released
On December 21, 2012, the United States and Ireland signed a reciprocal bilateral agreement setting out the Model 1 approach to implementing FATCA. On May 3, 2013, Irish Revenue released draft Financial Reporting Regulations 2013 and supporting draft Guidance Notes on the Implementation of FATCA in Ireland to give effect to the US-Ireland IGA.

Please click here for more information.

 
isle_of_man
Isle of Man
Model 1A (Reciprocal) 2013-12-13 Agreement signed and released
The US Treasury announced and the Manx government announced that the governments signed an IGA on December 13, 2013.  The US-Isle of Man IGA is substantially similar to the Model 1A Agreement as of November 4, 2013 that includes a reciprocal approach for the sharing of information between the two governments.
israel
Israel
    Actively engaged in a dialogue
The US Treasury announced on November 8, 2012 that the US and Israel were actively engaged in a dialogue towards concluding an IGA. No further information has been provided. See announcement by US Treasury on November 8, 2012.
italy
Italy
Model 1A (Reciprocal) 2014-01-10 Agreement signed and released
The Italian Treasury Department and US Treasury announced that the US and Italian governments have signed an IGA to implement FATCA on January 10, 2014.  The US Treasury had previously announced on November 8, 2012 that the US Treasury and Italian government were in the process of finalizing an IGA.
jamaica
Jamaica
    Final negotiations underway
On May 29, 2013, the Bank of Jamaica (on behalf of the Jamaican government) announced that the Jamaican government had approved the negotiation of a Model 1 IGA with the United States.
japan
Japan
Model 2 2013-06-11 Agreement signed and released
The Japanese and US tax authorities on June 11, 2013 released a statement setting out a Model 2 IGA framework whereby Japanese financial institutions will report directly to the IRS. Unlike other FATCA agreements, the Japanese arrangement is called a Statement of Mutual Cooperation and Understanding Between the US Department of the Treasury and the Authorities of Japan to Improve International Tax Compliance and to Facilitate Implementation of FATCA. On December 18, 2013, the Japanese government announced that it had updated its agreement with the United States to include new language on the revised effective date of FATCA and the reporting high-value accounts.
jersey
Jersey
Model 1A (Reciprocal) 2013-12-13 Agreement signed and released
The US Treasury announced on November 8, 2012 that US Treasury and Jersey were in the process of finalizing an IGA and had hoped to conclude negotiations by the year end of 2012. However, it appears no agreement has been finalized. The US Treasury announced and the Government of Jersey announced that the governments signed an IGA on December 13, 2013.  The US-Jersey IGA is substantially similar to the Model 1A Agreement as of November 4, 2013 that includes a reciprocal approach for the sharing of information between the two governments.
korea
Korea
    Actively engaged in a dialogue
The US Treasury announced on November 8, 2012 that the US and Korea were actively engaged in a dialogue towards concluding an IGA. No further information has been provided. See announcement by US Treasury on November 8, 2012.
lebanon
Lebanon
    Working to explore options
The US Treasury reported on November 8, 2012 that the US and Lebanon were working to explore options for intergovernmental engagement. See announcement by US Treasury on November 8, 2012.
liechtenstein
Liechtenstein
    Actively engaged in a dialogue
The US Treasury announced on November 8, 2012 that the US and Liechtenstein were actively engaged in a dialogue towards concluding an IGA. No further information has been provided. See announcement by US Treasury on November 8, 2012.
luxembourg
Luxembourg
Model 1   Final negotiations underway
The Luxembourg Ministry of Finance announced that on February 27, 2014, Luxembourg and United States negotiating teams have agreed on the substance of the future Model 1 Agreement between the Governments. The announcement states that the IGA will be signed “as soon as possible” and will then be subject to the Luxembourg procedure of parliamentary approval. This follows an April 10, 2013 announcement and a May 21, 2013 release from the Luxembourg Government regarding the status of negotiations and model type. Luxembourg was on the original list of jurisdictions noted in a November 8, 2012 US Treasury press release which listed various jurisdictions in which it was working to explore IGA options.
malaysia
Malaysia
    Actively engaged in a dialogue
The US Treasury reported on November 8, 2012 that the US and Malaysia were working to explore options for intergovernmental engagement. See announcement by US Treasury on November 8, 2012.
malta
Malta
Model 1A (Reciprocal) 2013-12-16 Agreement signed and released
The US Treasury announced and the Government of Malta announced that the governments signed an IGA on December 16, 2013.  The US-Malta IGA is substantially similar to the Model 1A Agreement as of November 4, 2013 that includes a reciprocal approach for the sharing of information between the two governments.

Please click here for more information.

mauritius
Mauritius
Model IA (Reciprocal) 2013-12-27 Agreement signed and released
The Mauritius Government and the US Treasury announced the signing of an IGA to implement FATCA on December 27, 2013.  A tax information and exchange agreement (TIEA) was also signed. The release of this IGA follows a previous announcement on February 18, 2013 by the Mauritius Ministry of Finance & Economic Development of its interest in entering into an IGA with the US to become FATCA compliant.
mexico
Mexico
Model IA (Reciprocal) 2012-11-19 Agreement signed and released
The US-Mexico IGA closely follows the Model IA Agreement issued in July 2012 by the US Department of Treasury and includes a reciprocal approach to the sharing of information between the two governments.
 
the_netherlands
Netherlands
Model 1A (Reciprocal) 2013-12-18 Agreement signed and released
The US Treasury announced and the Dutch government announced that the governments signed an IGA on December 18, 2013.  The US-Netherlands IGA is substantially similar to the Model 1A Agreement as of November 4, 2013 that includes a reciprocal approach for the sharing of information between the two governments.
 
new_zealand
New Zealand
    Actively engaged in a dialogue
On November 22, 2013, Revenue Minister Todd McClay announced the introduction of the Taxation (Annual Rates, Employee Allowances, and Remedial Matters) Bill, omnibus legislation that includes provisions to amend New Zealand's laws to enable compliance with an upcoming IGA with the United States to implement FATCA.  The New Zealand Inland Revenue has issued a regulatory impact statement as well as commentary that explains the FATCA related provisions in the legislation. In a May 14, 2013 announcement, the New Zealand government said that it is reviewing options to help alleviate financial institutions’ concerns regarding FATCA compliance.  This development follows a previous announcement from the New Zealand Revenue Minister that New Zealand will negotiate an IGA with the United State and the US Treasury statement that the United States and New Zealand were actively engaged in a dialogue towards concluding an IGA.
norway
Norway
Model 1A (Reciprocal) 2013-04-15 Agreement signed and released
The US-Norway FATCA Agreement substantially follows the Model 1A (Reciprocal) agreement as of November 2012.
poland
Poland
    Agreement signed or initialed but text not officially released
The Polish Government has noted publicly (see link) that an IGA between the Polish and US Governments has been initialed by the parties. However, the text of this agreement has not been officially released by either government.
romania
Romania
    Working to explore options
The US Treasury reported on November 8, 2012 that the US and Romania were working to explore options for intergovernmental engagement. See announcement by US Treasury on November 8, 2012.
russia
Russia
    Working to explore options
The US Treasury reported on November 8, 2012 that the US and Russia were working to explore options for intergovernmental engagement. See announcement by US Treasury on November 8, 2012.
seychelles
Seychelles
    Working to explore options
The US Treasury reported on November 8, 2012 that the US and Seychelles were working to explore options for intergovernmental engagement. See announcement by US Treasury on November 8, 2012.
singapore
Singapore
    Actively engaged in a dialogue
On November 13, 2013, the Singapore Ministry of Foreign Affairs announced that discussions with the United States to finalize an IGA are “progressing smoothly." On July 18, 2013, the Singapore Ministry of Finance announced the opening of a consultation on proposed amendments to the draft legislation to facilitate FATCA compliance.  This development follows a previous announcement from the Singapore government that it plans to sign a Model 1 IGA and the US Treasury statement that the United States and Singapore were actively engaged in a dialogue towards concluding an IGA.
sint_maarten
St. Maarten
    Working to explore options
The US Treasury reported on November 8, 2012 that the US and Sint Maarten were working to explore options for intergovernmental engagement. See announcement by US Treasury on November 8, 2012.
the_slovak_republic
Slovak Republic
    Actively engaged in a dialogue
The US Treasury announced on November 8, 2012 that the US and the Slovak Republic were actively engaged in a dialogue towards concluding an IGA. No further information has been provided. See announcement by US Treasury on November 8, 2012.
slovenia
Slovenia
  2014-01-28 Agreement signed or initialed but text not officially released
The Republic of Slovenia’s Ministry of Finance announced that the governments of the US and Slovenia signed an IGA to implement FATCA. The US Treasury reported on November 8, 2012 that the US and Slovenia were working to explore options for intergovernmental engagement. See announcement by US Treasury on November 8, 2012.
south_africa
South Africa
    Actively engaged in a dialogue
On February 8, 2013, the National Treasury and the South Africa Revenue Service announced that they were opening negotiations with the US Treasury to conclude an IGA to implement FATCA. See the US Treasury FATCA update website.
spain
Spain
Model 1A (Reciprocal) 2013-05-14 Agreement signed and released
The US-Spain IGA is substantially similar to the Model 1A IGA as of November 2012. See government announcement on May 14, 2013.
sweden
Sweden
    Actively engaged in a dialogue
The US Treasury announced on November 8, 2012 that the US and Sweden were actively engaged in a dialogue towards concluding an IGA. No further information has been provided. See announcement by US Treasury on November 8, 2012.
switzerland
Switzerland
Model 2 2013-02-14 Agreement signed and released
In conjunction with the signing of this IGA, press releases were issued by the US Treasury and Swiss Federal Department of Finance. On June 7, 2013, Switzerland and the United States signed a Memorandum of Understanding on interpretations regarding the IGA. See the Swiss Federal Department of Finance press release announcing the Memorandum of Understanding. On September 30, 2013, Switzerland announced that it and the United States amended the US-Switzerland IGA to reflect the changes in the FATCA implementation timelines set forth in Notice 2013-43.  The Swiss Parliament approved the IGA on September 27, 2013.
taiwan
Taiwan
    Working to explore options
On April 2, 2013, the Taiwanese Financial Supervisory Commission and Ministry of Finance jointly announced that both agencies and the US Treasury had reached a consensus to pursue an IGA to facilitate the implementation of FATCA.  See the US Treasury FATCA update website.
trinidad-tobago
Trinidad and Tobago
    Working to explore options
On August 7, 2013, the Government of the Republic of Trinidad and Tobago announced the Caribbean Community had agreed on a regional approach to compliance with FATCA.
united_kingdom
United Kingdom
Model IA (Reciprocal) 2012-09-12 Agreement signed and released
The US-UK IGA closely follows the Model 1A Agreement issued in July 2012 by the US Treasury and includes a reciprocal approach to the sharing of information between the two governments.  On August 7, 2013, HM Treasury presented The International Tax Compliance (United States of America) Regulations 2013 to implement the US-UK IGA to the UK House of Commons (with a September 1, 2013 effective date).  HMRC has also issued a memorandum explaining the regulations and updated its Guidance Notes to implement the regulations.
 

The information provided above is based on publically available information which is subject to change. As such, PwC does not make any representation as to the completeness and accuracy of the table.