Fatca Model 2 Agreement

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The IRS will be able to send “group requests” to the FATCA partner based on aggregated information notified by an FFI and standards set out in an information exchange agreement. The FATCA partner then has six months to provide the requested information in the same format that would be reported if the FFI had reported it directly to the IRS. If, for any reason, the response is delayed, the FFI must treat the corresponding accounts as recalcitrant and withhold them under FATCA, from the date of the six-month period and the date on which the information is exchanged with the IRS. If the foreign government cooperates in a timely manner with the IRS`s requests for information, compliant FFIs would not be required to withhold or close taxes on recalcitrant accounts. In accordance with the Taiwan Relations Act, the parties to the agreement are the American Institute in Taiwan and the Taipei Economic and Cultural Representative Office in the United States. The U.S. Treasury has published model GIs that follow two approaches. In Model 1, the partner country`s financial institutions report information about U.S. accounts to the tax administration of the partner country. This tax authority then makes the information available to the United States. Model 1 is available in a cross-version (Model 1A) where the United States will also share information on the partner country`s taxpayers with the partner country and a non-reciprocal version (Model 1B).

Under Model 2, financial institutions in partner countries go directly to the U.S. Internal Revenue Service and the partner country is committed to reducing all legal barriers to these reports. [231] Model 2 is available in two versions: 2A without a tax information exchange agreement (TIEA) or Double Tax Convention (DTC), and 2B for countries that already have a TIEA or DTC. Agreements generally require Parliamentary approval in the countries with which they are concluded, but the United States does not want these agreements to be ratified as a treaty. Model 2 IGA combines elements of Switzerland`s and Japan`s joint statements with the United States, but not with others.

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