As reported, details of the so-called intergovernmental agreement (IGA) between the two countries were hammered out earlier this month, as the US has increasingly sought the help of foreign governments in its enforcement of the Foreign Account Tax Compliance Act, a piece of US legislation that is aimed at cracking down on US citizens who use foreign accounts to avoid paying US taxes.
The signing took place in Dublin, and brings to four the number of FATCA IGAs that have been formally signed thus far. The others were between the US and the UK, Denmark and Mexico. Others have been agreed but not yet signed, and many more are said to be under discussion.
While existing Ireland-US tax agreements already provide for the exchange of information for tax purposes, the agreement signed today “goes a step further by providing for the automatic exchange of more detailed information on an annual basis”, according to a statement released today by the Irish Finance Ministry, and posted on its website.
In that statement, Michael Noonan, Ireland’s Minister for Finance, noted the fact that Ireland was one of the first countries in the world to formally sign up to the FATCA regime, and predicted the agreement would “have a positive impact on trade and investment between Ireland and the United States”, while also providing “certainty and clarity to Irish and American financial institutions” that are interested in doing business with one another.
To view the text of the agreement, click here.
President Obama signed the bill containing the FATCA provisions in 2010. The original implementation date was pushed back to enable financial institutions around the world more time to prepare for it. It is now set to begin taking effect in 2014.
At the time the legislation was passed, the total value of such hidden assets was estimated at around $10bn.
Under FATCA, banks and other foreign financial institutions that refuse to disclose information to the IRS face a 30% withholding tax on US source payments regardless of whether the recipient is a US taxpayer.
In other FATCA news, the Reuters news agency, citing unnamed accounting industry sources, is reporting that the US Treasury Department "will miss a year-end deadline" to publish the final FATCA rules.
"A spokeswoman for the Treasury Department on Tuesday would not confirm whether the year-end deadline will be met," Reuters said.
