US signs FATCA IGAs with Bahrain and Greece

18 and 19 January 2017, the US signed Model 1 intergovernmental agreements (IGAs) with Bahrain and Greece respectively US to facilitate compliance with the US Foreign Account Tax Compliance Act (FATCA) by financial institutions (FIs).

FATCA is intended to ensure that the US Internal Revenue Service obtains information on financial accounts held at foreign financial institutions (FFIs) by US persons. Failure by an FFI to disclose information on their US clients results in a requirement to withhold 30% tax on payments of US-sourced income.

The US had previously agreed to a FATCA IGA “in substance” with both countries, such that Bahrain has been treated as if it has had an IGA in force as of 30 June 2014 and Greece as of 30 November 2014.

The IGA with Greece is accompanied by an understanding in respect of the treatment under FATCA of securities registered in the Bank of Greece or in the Central Securities Depository as to whether they are held through participating or non-participating financial institutions.