FATCA; Italy signs Intergovernmental Agreement with the US
January 10, 2014.
Agreement between the Government of the United States of America and the Government of the Republic of Italy to Improve International Tax Compliance and to Implement FATCA
Whereas, the Government of the United States of America and the Government of the Republic of Italy (each, a “Party”) have a longstanding and close relationship with respect to mutual assistance in tax matters and desire to conclude an agreement to improve international tax compliance by further building on that relationship,
Whereas, Article 26 of the Convention between the Government of the United States of America and the Government of the Republic of Italy for the Avoidance of Double Taxation with Respect to Taxes on Income and the Prevention of Fraud or Fiscal Evasion, done at Washington on August 25, 1999, (the “Convention”) authorizes exchange of information for tax purposes, including on an automatic basis,
Whereas, the United States of America enacted provisions commonly known as the Foreign Account Tax Compliance Act (“FATCA”), which introduce a reporting regime for financial institutions with respect to certain accounts, Whereas, the Government of the Republic of Italy is supportive of the underlying policy goal of FATCA to improve tax compliance,
Whereas, FATCA has raised a number of issues, including that Italian financial institutions may not be able to comply with certain aspects of FATCA due to domestic legal impediments,
Whereas, the Government of the United States of America collects information regarding certain accounts maintained by U.S. financial institutions held by residents of the Republic of Italy and is committed to exchanging such information with the Government of the Republic of Italy and pursuing equivalent levels of exchange,
Whereas, the Parties are committed to working together over the longer term towards achieving common reporting and due diligence standards for financial institutions,
Whereas, the Government of the United States of America acknowledges the need to coordinate the reporting obligations under FATCA with other U.S. tax reporting obligations of Italian financial institutions to avoid duplicative reporting,
Whereas, an intergovernmental approach to FATCA implementation would address legal impediments and reduce burdens for Italian financial institutions,
Whereas, the Parties desire to conclude an agreement to improve international tax compliance and provide for the implementation of FATCA based on domestic reporting and reciprocal automatic exchange pursuant to the Convention and subject to the confidentiality and other protections provided for therein, including the provisions limiting the use of the information exchanged under the Convention.
For assistance with any tax matters, including Foreign Account Tax Compliance Act (FATCA), IRS representation and disclosing your unreported foreign bank accounts, you may contact Zaher Fallahi, Tax Attorney, CPA, at (310) 719-1040 (Los Angeles) or (714) 546-4272 (Orange County), or e-mail to [email protected]