What is IGA in FATCA?
What is an Intergovernmental Agreement or IGA? An IGA is a bilateral agreement between a country’s government and the U.S. government that facilitates compliance with FATCA. The model agreements enable FIs in the designated jurisdictions to comply with FATCA, especially where privacy laws exist.
What is the difference between IGA Model 1 countries and IGA Model 2 countries?
Unlike under a Model 1 IGA where an FFI will report Reportable Information to the FATCA Partner, under a Model 2 IGA an FFI will report that information directly to the IRS.
What is IGA model1?
The term Model 1 IGA means an agreement or arrangement between the United States or the Treasury Department and a foreign government or one or more agencies thereof to implement FATCA through reporting by financial institutions to such foreign government or agency thereof, followed by automatic exchange of the reported …
What is FATCA in simple words?
The Foreign Account Tax Compliance Act (FATCA) is a tax law that compels U.S. citizens at home and abroad to file annual reports on any foreign account holdings.
How does a FFI comply with FATCA regulations?
FFIs are encouraged to either directly register with the IRS to comply with the FATCA regulations (and FFI agreement, if applicable) or comply with the FATCA Intergovernmental Agreements (IGA) treated as in effect in their jurisdictions.
What do partner governments need to know about FATCA?
All IGAs contemplate that a partner government will require all foreign financial institutions (FFIs) located in its jurisdiction (that are not otherwise exempt) to identify U.S. accounts and report information about U.S. accounts.
Why are IGAS important in the implementation of FATCA?
IGAs with partner jurisdictions facilitate the effective and efficient implementation of FATCA. They remove domestic legal impediments to compliance. They reduce burdens on FFIs located in partner jurisdictions.
How to register a financial institution with FATCA?
Select either a “Single” FFI or “Member” FFI in Part 1, Question 1 of the FATCA Registration (as appropriate). Select “Registered Deemed-Compliant Financial Institution (including a Reporting Financial Institution under a Model 1 IGA)” in Part 1, Question 4.