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FATCA Intergovernmental Agreements—Could This Evolve Into the Primary Approach for Global Implementation of FATCA?  


Author:  Paul M.  Schmidt.; Michael W.  Nydegger .


Source: Volume 30, Number 02, Winter 2013 , pp.3-21(19)




Journal of Taxation of Investments

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Abstract: 

Much attention has been paid to the FATCA Proposed Regulations,but the primary method in which any foreign financial institutions (FFIs) may be regulated under FATCA is through intergovernmental agreements for the implementation of FATCA. This has become increasingly likely with the recent announcement that Treasury is negotiating more than 50 such agreements. While most FFIs likely will find intergovernmental agreements helpful in the long run, in the near term uncertainty may linger until (1) the FATCA partners adopt additional legislation and regulations to eliminate barriers to FATCA implementation, and (2) the United States finalizes its FATCA regulations, which hopefully will address the interaction of the regulatory regime with the intergovernmental agreements. This article discusses the benefits s of FATCA intergovernmental agreements, the reasons they are necessary, some of the future steps that likely are necessary given the possible proliferation of FATCA intergovernmental agreements, and some of the details of the Model 1 Agreement. A forthcoming article will further explore the recently published Model 2 Agreement, in addition to final regulations when those are published.

Keywords:  FATCA, IGAS, intergovernmental agreement, Model 1 reciprocal agreement, Model 1 non-reciprocal agreement

Affiliations:  1: Baker & Hostetler LLP; 2: Baker & Hostetler LLP.

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