Financial Crime World

FATCA Agreements in Place with Over 100 Jurisdictions

Washington D.C. - The United States has reached agreements with over 100 jurisdictions to implement the Foreign Account Tax Compliance Act (FATCA), a landmark tax information-sharing law aimed at combating offshore tax evasion.

Intergovernmental Agreements (IGAs)

The IGAs, developed by the US Treasury Department in collaboration with foreign governments, require financial institutions in participating countries to report information on US account holders to the Internal Revenue Service (IRS) and provide access to that information for US tax authorities.

Jurisdictions with Signed IGAs

According to a recent update from the US Treasury, IGAs have been signed with 113 jurisdictions, including:

  • Tunisia
  • Turkey
  • Turkmenistan
  • Ukraine
  • United Arab Emirates
  • United Kingdom
  • Uzbekistan
  • Vietnam
  • And many others

The agreements went into effect in various jurisdictions between 2014 and 2021.

Model 1 IGAs vs. Model 2 IGAs

There are two types of IGAs:

Model 1 IGA

The most common type of agreement, which requires financial institutions to report information on US account holders to the IRS. Jurisdictions that have signed a Model 1 IGA include:

  • United Kingdom
  • Ukraine
  • Vietnam

Model 2 IGA

A smaller number of jurisdictions have signed Model 2 IGAs, which require foreign financial institutions to identify and report on US account holders to their local tax authorities, who will then exchange that information with the IRS.

Statements and Notifications

In addition to the IGAs, the US has also issued various statements and notifications related to FATCA implementation. These include:

  • Joint statements between the US Treasury and other governments
  • Notifications of more favorable terms for certain jurisdictions

Impact of FATCA

The widespread adoption of FATCA IGAs is seen as a significant step in combating offshore tax evasion and promoting transparency in international financial transactions. While some have criticized the law for being overly broad or invasive, supporters argue that it helps to level the playing field and prevent wealthy individuals from hiding assets abroad to avoid paying taxes.

Ongoing Efforts

The US Treasury continues to work with foreign governments to finalize remaining IGAs and ensure a smooth implementation of FATCA globally.