The US Department of the Treasury has announced that the US has signed an intergovernmental agreement (IGA) with France to implement the Foreign Account Tax Compliance Act (FATCA).
Enacted in 2010, FATCA aims to curtail offshore tax evasion by facilitating the exchange of tax information. With today’s agreement, 10 FATCA IGAs have been signed to date.
Robert B. Stack, deputy assistant secretary for International Tax Affairs, said: "France has been an enthusiastic supporter of our effort to promote global tax transparency and critical to drafting a model of FATCA implementation. This agreement demonstrates the growing global momentum behind FATCA and strong support from the world’s most important economies."
France was among the first countries to champion the underlying goals of FATCA and its intergovernmental approach in 2012. The agreement was signed today by US Ambassador to France Charles H. Rivkin and French Finance Minister Pierre Moscovici.
Ambassador Rivkin said: "The signing of this agreement marks an important step forward in the collaboration between the United States and France to combat tax evasion."
FATCA seeks to obtain information on accounts held by US taxpayers in other countries. It requires U.S. financial institutions to withhold a portion of payments made to foreign financial institutions (FFIs) who do not agree to identify and report information on US account holders.
FFIs have the option of entering into agreements directly with the IRS, or through one of two alternative Model IGAs signed by their home country. The IGA between the United States and France is the Model 1A version, meaning that FFIs in France will be required to report tax information about U.S. account holders directly to the French government, which will in turn relay that information to the IRS. The IRS will reciprocate with similar information about French account holders.
In addition to the 10 FATCA IGAs that have been signed to date, Treasury has also reached 16 agreements in substance and is engaged in related conversations with many more jurisdictions.