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FATCA Agreement between United States and Chile

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The agreement outlines the terms for the implementation of the Foreign Account Tax Compliance Act (FATCA) between the United States and Chile. Below are key provisions of the agreement.

Transitional Relief

In order to facilitate a smooth transition, the following relief is provided:

• Deemed-compliant or non-participating Chilean Financial Institutions: Will be treated as participating FFI for purposes of Section 1471 of the U.S. Internal Revenue Code.
• Related Entities or branches: Will also be treated similarly, subject to specific conditions.

Coordination of Definitions

To ensure consistency in interpretation and application, the following provision is made:

• Use of U.S. Treasury Regulations definitions: Chile may use definitions from relevant U.S. Treasury Regulations instead of those in the agreement.

Verification and Enforcement

The United States Competent Authority will be responsible for verifying compliance with FFI Agreement requirements. The following procedures are outlined:

• Inquiries for minor errors or administrative issues: The United States Competent Authority may make inquiries to Reporting Chilean Financial Institutions.
• Significant non-compliance: Will result in treatment as a Non-Participating Financial Institution after 12 months of notification.

Note: This article provides a summary of the agreement and is not intended to be an exhaustive or definitive analysis.