Luxembourg, US Sign FATCA Deal
Luxembourg and the US have signed an intergovernmental agreement (IGA) to implement the Foreign Account Tax Compliance Act (FATCA).
Luxembourg and the US negotiated a Model 1 IGA, requiring the Luxembourg Tax Administration and the US Internal Revenue Service (IRS) to exchange information automatically on accounts held by US citizens and by persons resident in the US in foreign financial institutions in the Grand Duchy. The IGA’s information exchange provisions will be reciprocal. Luxembourg’s parliament must now approve the IGA.
The Luxembourg Government said that Luxembourg banks would have sufficient time to conform with the requirements of the IGA, following the electronic procedure defined by the Internal Revenue Service.
The Luxembourg Government explained that the signing of the FATCA IGA, as well as Luxembourg’s recent decision to give the go-ahead to the revised European Union (EU) Savings Tax Directive, is evidence of the nation’s strong commitment to greater transparency in tax matters, on the basis of international standards applied by major global financial centers.
The text will be published on Luxembourg’s Finance Ministry website in April.
