The US IRS on December 1 released an advance copy of guidance that provides that countries that have reached FATCA intergovernmental agreements (IGAs) “in substance” that do not sign an IGA by December 31 will continue to be treated as if an IGA was in effect as long as the country displays a “firm resolve” to sign an IGA as soon as possible. The new guidance, Announcement 2014-38, will be published in the Internal Revenue Bulletin on December 15.
Announcement 2014-17, released in April, previously provided that countries that reached in substance IGAs must sign an IGA by December 31 to remain on the list of jurisdictions that are treated as if they had an IGA in effect.
According to the new announcement, though, 53 jurisdictions that reached in substance IGAs on or before June 30 have still have not signed an IGA with the US.
The new guidance provides that after December 31 Treasury will review the jurisdictions that have an agreement in substance each month to assess whether the jurisdictions should continue to be treated as if it has an IGA in effect. To remain on the list, the country must display a “firm resolve” to sign or bring an IGA agreement into force as soon as possible. Factors showing this resolve include whether the country is responsive to US communications about the IGA and whether the jurisdiction raises concerns regarding its ability to sign or bring into force the text that was agreed to in substance.
IRS also announced that it will treat 10 jurisdictions that agreed to Model 1 IGAs in substance after June 30, but have not yet signed an IGA, as having IGAs in effect as of November 30. The jurisdictions are Angola, Cambodia, Greece, the Holy See, Iceland, Kazakhstan, Montserrat, the Philippines, Trinidad and Tobago, and Tunisia.
Macao will be treated as if it had a Model 2 IGA in effect as of November 30, 2014, the IRS said.
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