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.
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)
|Iceland||DTC CAA – pdf (117 KB)||5/5/2017||5/5/2017|
|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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