Tax Information Exchange Agreement (TIEA)

Tax Information Exchange Agreement (TIEA)

Who does the United States Exchange Tax Information With?

Tax Information Exchange Agreements: The TIEA is equivalent to the little brother or sister of a DTA (Double Tax Agreement). Generally, when the United States wants to enter into a tax agreement with another country, but the traditional tax treaty is not proper, it instead enters into a TIEA or Tax Information Exchange Agreement.

The traditional tax treaty may not be proper, because of the disparate income laws and regulations of the different countries. Instead of double-tax agreement, which is designed to limit and define certain types of tax laws between the countries, the goal of the TIEA is to facilitate the exchange of tax information and to avoid offshore tax evasion and fraud.

And, with the IRS continuing to aggressively enforce foreign accounts compliance and unreported foreign income for taxpayers worldwide, it can put non-compliant taxpayers in danger.

Why?

It increases the ability of the IRS to enforce U.S. tax law, fines, and penalties.

What is a TIEA?

The TIEA is used to exchange tax information between different countries.

As provided by the OECD (Organization for Economic Co-operation and Development):

“The purpose of this Agreement” is to promote international co-operation in tax matters through exchange of information.  It was developed by the OECD Global Forum Working Group on Effective Exchange of Information.

The Agreement grew out of the work undertaken by the OECD to address harmful tax practices.

The lack of effective exchange of information is one of the key criteria in determining harmful tax practices. The Agreement represents the standard of effective exchange of information for the purposes of the OECD’s initiative on harmful tax practices. 

This Agreement, which was released in April 2002, is not a binding instrument but contains two models for bilateral agreements.  A large number of bilateral agreements have been based on this Agreement (see below).”

U.S. Taxpayers at Risk

The reason the TIEA puts taxpayers at risk, is because even in foreign countries that may not have entered into a Double-Tax Treaty or FATCA Agreement, financial information is still being exchanged.

If a Taxpayer has not properly reported their foreign income, and/or properly submitted their FBAR and FATCA Reporting – they may become subject to the Internal Revenue Service offshore fines and penalties.

Sample Tax Information Exchange Agreement Language

Here is sample language from a TIEA between the U.S. and Cayman Islands:

“Whereas the Government of the United States of America and the Government of the Cayman Islands desire to increase international tax transparency and improve access to information regarding the global allocation of the income, the taxes paid, and certain indicators of the location of economic activity among tax jurisdictions in which multinational enterprise groups (“MNE Groups”) having a Reporting Entity resident for tax purposes in the Cayman Islands operate through the automatic exchange of annual country-by-country reports (“CbC Reports”) by the Competent Authority of the Cayman Islands (“Cayman Islands Competent Authority”) with the Competent Authority of the United States of America (the “United States Competent Authority”), with a view to assessing high-level transfer pricing risks and other base erosion and profit shifting related risks, as well as for economic and statistical analysis, where appropriate.

 

United States TIEA and DTA List

Bermuda TIEA CAA – pdf (116 KB) 12/7/2017 12/7/2017
Brazil TIEA CAA – pdf (119 KB) 7/20/2017 7/20/2017
Bulgaria6 DTC CAA In Negotiations In Negotiations
Canada DTC CAA – pdf (120 KB) 6/7/2017 6/7/2017
Cayman Islands TIEA CAA – pdf (295 KB) 3/8/2018 3/8/2018
Colombia TIEA CAA – pdf (117 KB) 8/30/2017 8/30/2017
Croatia MAC CAA – pdf (135 KB) 7/10/2018 7/10/2018
Curacao TIEA CAA In Negotiations In Negotiations
Cyprus DTC CAA In Negotiations In Negotiations
Czech Republic DTC CAA – pdf (118 KB) 9/28/2017 10/25/2017
Denmark DTC CAA – pdf (129 KB) 6/21/2017 6/21/2017
Estonia DTC CAA – pdf (349 KB) 7/26/2017 4/25/2018
Finland DTC CAA – pdf (289 KB) 9/27/2017 9/27/2017
France1 – 4 – 9 DTC CAA In Negotiations In Negotiations
Germany3 _ 5 – 8 DTC CAA In Negotiations In Negotiations
Gibraltar TIEA CAA – pdf (296 KB) 12/18/2018 12/18/2018
Greece DTC CAA – pdf (325 KB) 9/27/2017 5/21/2018
Guernsey TIEA CAA – pdf (130 KB) 6/22/2017 12/19/2017
Hungary DTC IGA – pdf (273 KB)

DTC CAA – pdf (302 KB)

10/25/2018

12/6/2018

12/21/2018

12/21/2018

Iceland DTC CAA – pdf  (117 KB) 5/5/2017 5/5/2017
India7 DTC-IGA

DTC-CAA

3/27/2019

4/09/2019

4/29/2019

4/29/2019

Indonesia2 DTC CAA – pdf (114 KB) 6/13/2018 6/13/2018
Ireland DTC CAA – pdf (289 KB) 6/15/2017 6/15/2017
Isle of Man TIEA CAA – pdf (290 KB) 7/20/2017 7/20/2017
Israel DTC CAA In Negotiations In Negotiations
Italy DTC CAA – pdf (118 KB) 9/27/2017 9/27/2017
Jamaica DTC CAA – pdf (117 KB) 7/20/2017 TBD
Japan DTC CAA – pdf (118 KB) 10/12/2018 10/12/2018
Jersey TIEA CAA – pdf (462 KB) 12/7/2017 12/7/2017
Latvia DTC CAA – pdf (133 KB) 6/21/2017 6/21/2017
Liechtenstein TIEA CAA – pdf (324 KB) 5/9/2018 12/19/2018
Lithuania DTC CAA – pdf (492 KB) 8/30/2017 8/30/2017
Luxembourg DTC CAA – pdf (117 KB) 10/18/2017 10/18/2017
Malta DTC CAA – pdf (347 KB) 7/20/2017 12/19/2017
Mauritius TIEA CAA – pdf (117 KB) 4/27/2018 4/27/2018
Mexico DTC/TIEA CAA – pdf (120 KB) 10/19/2017 10/19/2017
Monaco  TIEA CAA In Negotiations In Negotiations
Netherlands DTC CAA – pdf (168 KB) 4/11/2017 4/11/2017
New Zealand DTC CAA – pdf (129 KB) 5/11/2017 5/11/2017
Norway DTC CAA – pdf (134 KB) 4/26/2017 4/26/2017
Poland DTC CAA – pdf (135 KB) 12/28/2017 12/28/2017
Portugal DTC CAA – pdf (117 KB) 10/2/2017 10/2/2017
Republic of Korea DTC CAA – pdf (115 KB) 6/22/2017 6/22/2017
Singapore TIEA CAA  In Negotiations  In Negotiations
Slovakia DTC CAA – pdf (118 KB) 6/21/2017 6/21/2017
Slovenia DTC CAA – pdf (120KB) 6/4/2018 6/4/2018
South Africa DTC CAA – pdf (119 KB) 5/26/2017 5/26/2017
Spain DTC CAA – English pdf 12/19/2017 12/19/2017
Sweden DTC CAA – pdf (121 KB) 9/28/2017 9/28/2017
United kingdom DTC CAA – pdf (117 KB) 8/16/2017 8/16/2017

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