Global Tax Alert | 31 May 2013

German Government announces signing of US-Germany FATCA Intergovernmental Agreement

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The German Government has announced the signing of a US-German “Intergovernmental Agreement for Implementing the Foreign Account Tax Compliance Act to Improve Offshore Tax Compliance and Reduce Burden.” The agreement was signed on 31 May 2013, in Berlin.

The background of the agreement is the US Foreign Account Tax Compliance Act (FATCA). Enacted in 2010, these provisions target non-compliance by US taxpayers using foreign accounts. The US/German Agreement is based on the “Model Intergovernmental Agreement for Implementing the Foreign Account Tax Compliance Act to Improve Offshore Tax Compliance and Reduce Burden,” which was developed by the US with Germany, France, Italy, Spain and the UK and published on 26 July 2012.

According to a prior 21 February 2013 press release of the Ministry, the German-US Agreement will include the following three principal elements:

  • German authorities will be obliged to collect from German resident financial institutions information concerning accounts of US resident customers, and to provide US authorities with such information;
  • Correspondingly, US authorities will provide German authorities with information concerning dividend and interest income, which US tax authorities collect from US financial institutions; and
  • The US commits itself to exclude all German resident financial institutions from the obligation to enter into agreements with US tax authorities to avoid US withholding tax collection under FATCA rules.

Under the US-German Agreement, the year 2014 will be the first period covered by the information exchange. To become effective, the agreement must be still ratified by the German parliament, which is expected to occur in 2013.

For additional information with respect to this Alert, please contact the following:

Ernst & Young LLP, German Tax Desk, New York
  • Jorg Menger
    +1 212 773 5250
    jorg.menger@ey.com
  • Thomas Eckhardt
    +1 212 773 8265
    thomas.eckhardt@ey.com
  • Simone Guter
    +1 212 773 4350
    simone.guter@ey.com
  • Robert Polatzky
    +1 212 773 7853
    robert.polatzky@ey.com
  • Theresa Seitner
    +1 212 773 0635
    theresa.seitner@ey.com
  • Daniela Ahrling
    +1 212 773 4752
    daniela.ahrling@ey.com
Ernst & Young LLP, EMEIA Financial Services German Tax Desk, New York
  • Christian Rengier
    +1 212 773 1149
    christian.rengier@ey.com

EYG no. CM3486