United States Signs Bilateral Agreement with Denmark to Implement FATCA

On November 15, 2012, the United States and Denmark signed a reciprocal bilateral agreement and memorandum of understanding laying out a cooperative governmental approach to implementing the Foreign Account Tax Compliance Act (FATCA). This is only the second such agreement signed by the United States; the first was signed with the United Kingdom earlier this year.

The agreement with Denmark is based on the Reciprocal Model 1 Template released by the United States Treasury in July 2012. The agreement takes effect as of the later of Jan. 1, 2013 or the date on which both parties have notified the other in writing that the necessary internal procedures to prepare for the enforcement of the agreement are complete.

The annexes contained in the agreement list exactly who or what individuals or entities will qualify as exempt beneficial owners, deemed-compliant financial institutions, nonparticipating institutions and exempt products.

An example of a deemed-compliant financial institution is: a small Danish financial institution with a local client base, no fixed place of business outside of Denmark and who does not solicit account holders outside of Denmark. In addition, certain collective investment vehicles, nonprofit organizations and housing cooperatives are also deemed-compliant.

This agreement is similar to the agreement the United States signed with the United Kingdom, but it also contains three features not included in the Reciprocal Model 1 Template:

1. A "most favored nation" provision extending to Denmark any more favorable future terms the U.S. may enter into with another jurisdiction.

2. Consultation between the two nations in the event that any conflicts may arise during the implementation of the agreement.

3. Under Article 9, a provision that all annexes are an integral part of the agreement.

To read the agreement, click here.

No Comments

Leave a comment
Comment Information

Contact the Law Office of Williams & Associates

For more information about our tax law services, or to discuss your tax matter, call our Sacramento office at (916) 488-8501 or toll free at (800) 684-7147. You may also send us an inquiry via email.

Contact the Firm

Bold labels are required.

Contact Information

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.


Privacy Policy

Office Location:

3600 American River Drive, Suite 135
Sacramento, CA 95864

Toll Free: 800-684-7147
Phone: 916-488-8501
Fax: 916-488-8196
Sacramento Law Office Map