The US has signed intergovernmental agreements with the Cayman Islands and Costa Rica this week to implement the Foreign Account Tax Compliance Act, according to a statement from the US Department of the Treasury.

The US has signed intergovernmental agreements with the Cayman Islands and Costa Rica to implement the Foreign Account Tax Compliance Act, according to a statement from the US Department of the Treasury.

FATCA, enacted in 2010, seeks to obtain information on accounts held by US taxpayers in other countries. It requires US financial institutions to withhold a portion of payments made to foreign financial institutions that do not agree to identify and report information on US account holders. FFIs have the option of entering into agreements directly with the IRS, or through one of two alternative Model IGAs signed by their home country. 

The Cayman Islands IGA is a Model 1B agreement, which means that FFIs in the Cayman Islands will be required to report tax information about US account holders directly to the Cayman Islands Tax Information Authority, which will relay that information to the IRS. 

The US and the Cayman Islands also signed a new Tax Information Exchange Agreement, replacing the original TIEA signed in 2001.

The Costa Rica IGA was also signed last week and is a Model 1A agreement, meaning that the US will also provide tax information to the Costa Rican government regarding Costa Rican individuals with accounts in the US.

Around two weeks ago, the US signed an IGA with France to implement FATCA (view more here).