The IRS announced on Thursday that the United States has entered into agreements with Australia and the United Kingdom implementing procedures to automatically exchange financial account information pursuant to the Foreign Account Tax Compliance Act (FATCA). These are the first so-called competent authority arrangements entered into under FATCA.
The competent authority arrangements put into effect procedures that the countries agreed to implement under their FATCA intergovernmental agreements (IGAs) signed in 2012 and 2014. Both Australia and the United Kingdom signed Model 1 IGAs under which financial institutions in those countries provide information on their U.S. account holders to their respective governments, which then forward the information to the IRS. In similar fashion, U.S. financial institutions will report on their Australian and U.K. account holders to the U.S. government, which will forward the information to the respective countries.
Under the recently signed competent authority arrangements, relevant information will be reported within nine months of the end of the calendar year to which the information relates. Such information includes names, addresses, and tax identification numbers of account holders at financial institutions; account balances or values; and the amount of interest paid.
The arrangements also cover what constitutes significant noncompliance, including reporting failures and failures to timely correct.
The arrangements designate 2014 and 2015 as a transition period for purposes of enforcement and administration of any data-collection, due-diligence, information-reporting, automatic information exchange, and withholding requirements described in the IGAs.
—Alistair M. Nevius (email@example.com) is The Tax Adviser’s editor-in-chief.