On May 8, 2014, the United States Department of the Treasury and the Government of Gibraltar signed an Intergovernmental Agreement (IGA). This agreement will facilitate international tax compliance under the over-arching framework of the United States Foreign Account Tax Compliance Act (FATCA). FATCA is designed to impede tax evasion from the United States and therefore decrees an automatic reporting regime for financial institutions. As the implementation of FATCA also requires foreign (i.e. non-US) financial institutions to report respective information on US citizens’ assets held overseas, IGAs establish a legal base for doing so. The Government of Gibraltar’s signing of an IGA with the US Treasury concludes an extensive process of cooperation with Gibraltan Businesses and Industry. Also, the consultation process considered the opinion of a special Working group set up to assess FATCA’s impact on the domestic Gibraltan financial services sector. The newly established IGA is the 27th agreement of its kind and gives evidence of a more intensive cooperation to halt tax-evasion at an international level. In this respect, Mr. Albert Isola, the Gibraltan minister responsible for financial services, welcomed its Territory’s IGA with the United States and held: “The international community considers automatic exchange of information to be the most effective way to tackle tax evasion while minimizing costs for governments and business”. PWC is monitoring these Intergovernment Agreements. Click here for the up-to-date FACTA IGA monitor.
Nicolai Behr is a compliance and dispute resolution attorney in Baker & McKenzie’s Munich office. He is a member of the steering committee of GlobalComplianceNews, a compliance news website with global reach moderated by Baker & McKenzie. He is a member of the committee "International" of the German Institute for Compliance. Dr. Behr is a regular speaker on compliance and white collar topics.