What You Give and What You Get: Reciprocity Under a Model 1 Intergovernmental Agreement on FATCA
McGill University - Faculty of Law
April 12, 2013
Cayman Fin. Rev. April 2013
As is well known within international tax circles by now, the U.S. Congress enacted FATCA in response to publicity surrounding well known foreign institutions, most especially in Switzerland, that helped US customers hide income and assets from the IRS. That publicity continues, reinforcing the need for the protection of the US tax base against erosion through criminal activity. Thus FATCA emerges as a defensive move against criminal behavior. But in the absence of reciprocity from the US itself, the reverse proposition remains possible: the United States perversely positions itself to gain from the very behavior it seeks to eliminate in other jurisdictions. This brief look at what countries give and what they get under an IGA with the US signals the vital role of reciprocity in making sure countries use international agreements to gain mutual advantage through cooperation rather than a unilateral edge in a dangerous game of undermine-thy-neighbor.
Number of Pages in PDF File: 8
Keywords: FATCA, IGA, international agreement, tax, international tax, reciprocity, tax policy, mutual agreement, tax evasion
JEL Classification: H11, H21, H87, F02, F50, F53, F59, Z13, E63, H2, K33, K34, N40, P45Accepted Paper Series
Date posted: July 12, 2013
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