Spain and USA sign FATCA agreement

This agreement for exchange of information is based on the model agreed in July 2012 jointly by UK, Germany, Italy, France, USA and Spain

On 20th November Spain and the United States of America have signed an agreement for the improvement of international tax compliance and the application of the Foreign Account Tax Compliance Act.

The Foreign Account Tax Compliance Act is an anti-fraud measure that will enter into force in the USA on 1st January 2013.

In compliance with the agreement which has just been signed, Spanish and American financial institutions must report to their tax authorities the information regarding taxpayers of the other signing country and, as a second step, the information will be exchanged automatically through an standardized procedure between both tax administrations.

Through this agreement Spanish financial entities shall be treated as complying and not subject to 30% withholding when perceiving payments of USA´s source without the need of a bilateral agreement with the IRS.