# FATCA Agreements with various countries



## Bevdeforges

Since FATCA is such a hot topic here, I thought that you might be interested in the latest development.

The US has signed agreements with a number of countries related to FATCA reporting and compliance. The Treasury Dept. has set up a page where you can see the Bilateral Agreement between the US and your country of residence.
Foreign Account Tax Compliance Act (FATCA)

Cheers,
Bev


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## Bevdeforges

I've just had a read-through of the Bilateral Agreement on FATCA between the US and France, and there are some very interesting points. Since all these agreements are based on a model agreement, they may or may not be similar to what is in the other FATCA agreements.

But the key "interesting" points are:


Basically, the FFI's (Foreign Financial Institutions) will start reporting account information from the middle of 2014. (In France, they will report it to the French government, not directly to the IRS.)

They are reporting the identity information on "US persons" holding accounts (including US social security number), but they are only reporting year end account balances.

They do not have to report any account opened before 30 June 2014 if the year-end balance is less than $50,000.

They will not report certain types of accounts that are retirement savings or retirement investment accounts or certain tax advantaged accounts (mainly, accounts where interest earned is not taxed for French income tax purposes). This includes the following accounts: PERP, PERE, PREFON, Madelin, Livret A, Livret B, "jeune", Livret Developpement Durable, LEP, PEL, CEL and PEP. 

Banks and FFIs that do business only within France are exempt from the reporting requirements.

There is no guarantee that all the agreements contain these provisions, but it's definitely worth a read-through of your country's agreement to see what's there.

I tried to download the UK agreement, but had problems. If you're in the UK, I would definitely check that one to see if the FFIs are perhaps taking the UK style retirement savings accounts into consideration. And, if they do, please post your findings here!
Cheers,
Bev


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## jbr439

Bevdeforges said:


> ...
> 
> Banks and FFIs that do business only within France are exempt from the reporting requirements.
> ...


Do you know what "do business only within France" means? Does that mean that they only have a presence in France, or does it mean more than that? I ask because Canada is negotiating an IGA, and Canadian Credit Unions only have Canadian presences, so I'm curious.


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## Bevdeforges

jbr439 said:


> Do you know what "do business only within France" means? Does that mean that they only have a presence in France, or does it mean more than that? I ask because Canada is negotiating an IGA, and Canadian Credit Unions only have Canadian presences, so I'm curious.


Check the agreement texts. In the French agreement, they spell out quite clearly the terms for exempting "local" FFI's. There isn't a Canadian agreement yet (or I don't think there is) but check the model agreement on the same page and see if they include the exemption information in the annexes.
Cheers,
Bev


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## Nononymous

There is some suggestion/hope that some of the smaller Canadian credit unions may choose not to become FATCA compliant. If they do little or no business in the US, then their willingness to ignore FATCA would be useful for many potential dual-citizen customers. Not to mention a nice selling point to differentiate yourself from the competition.


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## maz57

I expect the reason "local" financial institutions are exempt is because they are totally disconnected from the US system; the USG has absolutely no leverage on them, i.e. no way to hit them with 30% withholding. 

And yeah, that fact may be a very good selling point. Who knows? Maybe we will witness a major uptick in the business of FATCA exempt businesses. Keep the big accounts at a non-compliant institution with a few bucks at a "big" bank for day to day transactions. Think safety deposit box with a door big enough to walk through!


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## BBCWatcher

That'll hit the market valuations of at least the private institutions, though. Note the agreement says France, not, say, France plus her neighbors. So it's a new cap on the growth potential of those institutions that choose that path (if any do).

Assuming FATCA or something very much like it is here to say -- a safe assumption I'd say -- an IGA and banking at a covered institution is a good thing. It means you're very unlikely to have problems opening or maintaining an account because the regulatory and reporting framework has been worked out in advance. Can't say the same about non-covered institutions. Some of them might still treat Americans as toxic to the extent that happens.


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