The Foreign Account Tax Compliance Act (“FATCA”) became law in March 2010 but implementation did not begin until February 2015 when foreign financial institutions began reporting US tax payer foreign accounts. FATCA targets tax non-compliance by the US Taxpayer with foreign accounts. If the US taxpayer does not report the account, and file Form 8938 annually for accounts over $50k (or foreign financial assets), they will be subject to a 30% US tax withholding by the payor of US income to the foreign account.
Foreign Financial Institutions (FFI) must register with the IRS obtaining a Global Intermediary Identification Number (GIIN) and report US source income. If not, the US payor must withhold 30% tax. Both US financial institutions and other US withholding agents must withhold 30% tax on certain payments to foreign entities that do not document their FATCA status and report information about non-financial foreign entities.
As of 2015, 59 countries have signed Model 1 agreements (Model I IGA), and 7 countries have signed Model 2 Agreements (Model 2 IGA). As of 6/30/14 32 countries have agreed but not signed Model 1 IGA, and 6 countries have agreed but not signed Model 2 IGA.
In total, 104 countries have agreed to IGAs (91 Model 1 IGA; 13 Model 2 IGA). Over 160,000 foreign financial institutions have been reported to provide the IRS with tax information on up to an estimated 10m US taxpayers with foreign accounts (and this number of FFIs is increasing as more countries implement the IGAs).
A Model 1 IGA is an inter-governmental agreement between the US and a foreign country that requires FFIs to report all FATCA-related information to their own country taxing authority which then reports the FATCA related information to the IRS. Some of these Model 1 IGAs require a reciprocal exchange of information between the US and the foreign country. A FFI under a Model 1 IGA will not need to to sign an FFI Agreement but will need to register on the IRS FATCA website registration portal or file form 8957.
A Model 2 IGA must register with the IRS and sign an FFI agreement and report directly to the IRS.
For complete list of the 104 countries, please see link