The IRS recently issued Announcement 2016-27
, which provides guidance on which jurisdictions are treated as if they have an intergovernmental agreement (IGA) in effect, but have not yet brought their IGA into force. In 2012, the U.S. government released Model 1 and Model 2 IGAs to facilitate implementation of the Foreign Account Tax Compliance Act (FATCA). As of the date of Announcement 2016-27, the United States had signed IGAs with 83 jurisdictions, 61 of which are in force. The United States has also reached agreements in substance with 30 jurisdictions
This announcement provides that, on Jan. 1, 2017, Treasury will begin updating the IGA list to provide that certain jurisdictions that have not brought their IGAs into force will no longer be treated as if they have an IGA in effect. Each jurisdiction with an IGA that is not yet in force and that wishes to continue to be treated as having an IGA in effect must comply with prescribed requirements by Dec. 31, 2016.
Tax professional standards statement
This content supports Grant Thornton LLP’s marketing of professional services and is not written tax advice directed at the particular facts and circumstances of any person. If you are interested in the topics presented herein, we encourage you to contact us or an independent tax professional to discuss their potential application to your particular situation. Nothing herein shall be construed as imposing a limitation on any person from disclosing the tax treatment or tax structure of any matter addressed herein. To the extent this content may be considered to contain written tax advice, any written advice contained in, forwarded with or attached to this content is not intended by Grant Thornton LLP to be used, and cannot be used, by any person for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code.
The information contained herein is general in nature and is based on authorities that are subject to change. It is not, and should not be construed as, accounting, legal or tax advice provided by Grant Thornton LLP to the reader. This material may not be applicable to, or suitable for, the reader’s specific circumstances or needs and may require consideration of tax and nontax factors not described herein. Contact Grant Thornton LLP or other tax professionals prior to taking any action based upon this information. Changes in tax laws or other factors could affect, on a prospective or retroactive basis, the information contained herein; Grant Thornton LLP assumes no obligation to inform the reader of any such changes. All references to “Section,” “Sec.,” or “§” refer to the Internal Revenue Code of 1986, as amended.