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

BermudaTIEA CAA – pdf (116 KB)12/7/201712/7/2017
BrazilTIEA CAA – pdf (119 KB)7/20/20177/20/2017
Bulgaria6DTC CAAIn NegotiationsIn Negotiations
CanadaDTC CAA – pdf (120 KB)6/7/20176/7/2017
Cayman IslandsTIEA CAA – pdf (295 KB)3/8/20183/8/2018
ColombiaTIEA CAA – pdf (117 KB)8/30/20178/30/2017
CroatiaMAC CAA – pdf (135 KB)7/10/20187/10/2018
CuracaoTIEA CAAIn NegotiationsIn Negotiations
CyprusDTC CAAIn NegotiationsIn Negotiations
Czech RepublicDTC CAA – pdf (118 KB)9/28/201710/25/2017
DenmarkDTC CAA – pdf (129 KB)6/21/20176/21/2017
EstoniaDTC CAA – pdf (349 KB)7/26/20174/25/2018
FinlandDTC CAA – pdf (289 KB)9/27/20179/27/2017
France1 – 4 – 9DTC CAAIn NegotiationsIn Negotiations
Germany3 _ 5 – 8DTC CAAIn NegotiationsIn Negotiations
GibraltarTIEA CAA – pdf (296 KB)12/18/201812/18/2018
GreeceDTC CAA – pdf (325 KB)9/27/20175/21/2018
GuernseyTIEA CAA – pdf (130 KB)6/22/201712/19/2017
HungaryDTC IGA – pdf (273 KB)

DTC CAA – pdf (302 KB)

10/25/2018

12/6/2018

12/21/2018

12/21/2018

IcelandDTC CAA – pdf  (117 KB)5/5/20175/5/2017
India7DTC-IGA

DTC-CAA

3/27/2019

4/09/2019

4/29/2019

4/29/2019

Indonesia2DTC CAA – pdf (114 KB)6/13/20186/13/2018
IrelandDTC CAA – pdf (289 KB)6/15/20176/15/2017
Isle of ManTIEA CAA – pdf (290 KB)7/20/20177/20/2017
IsraelDTC CAAIn NegotiationsIn Negotiations
ItalyDTC CAA – pdf (118 KB)9/27/20179/27/2017
JamaicaDTC CAA – pdf (117 KB)7/20/2017TBD
JapanDTC CAA – pdf (118 KB)10/12/201810/12/2018
JerseyTIEA CAA – pdf (462 KB)12/7/201712/7/2017
LatviaDTC CAA – pdf (133 KB)6/21/20176/21/2017
LiechtensteinTIEA CAA – pdf (324 KB)5/9/201812/19/2018
LithuaniaDTC CAA – pdf (492 KB)8/30/20178/30/2017
LuxembourgDTC CAA – pdf (117 KB)10/18/201710/18/2017
MaltaDTC CAA – pdf (347 KB)7/20/201712/19/2017
MauritiusTIEA CAA – pdf (117 KB)4/27/20184/27/2018
MexicoDTC/TIEA CAA – pdf (120 KB)10/19/201710/19/2017
Monaco TIEA CAAIn NegotiationsIn Negotiations
NetherlandsDTC CAA – pdf (168 KB)4/11/20174/11/2017
New ZealandDTC CAA – pdf (129 KB)5/11/20175/11/2017
NorwayDTC CAA – pdf (134 KB)4/26/20174/26/2017
PolandDTC CAA – pdf (135 KB)12/28/201712/28/2017
PortugalDTC CAA – pdf (117 KB)10/2/201710/2/2017
Republic of KoreaDTC CAA – pdf (115 KB)6/22/20176/22/2017
SingaporeTIEA CAA In Negotiations In Negotiations
SlovakiaDTC CAA – pdf (118 KB)6/21/20176/21/2017
SloveniaDTC CAA – pdf (120KB)6/4/20186/4/2018
South AfricaDTC CAA – pdf (119 KB)5/26/20175/26/2017
SpainDTC CAA – English pdf12/19/201712/19/2017
SwedenDTC CAA – pdf (121 KB)9/28/20179/28/2017
United kingdomDTC CAA – pdf (117 KB)8/16/20178/16/2017

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