On 26 August 2014, Lithuania and the United States signed a Foreign Account Tax Compliance Act (FATCA) Agreement.
FATCA seeks to obtain information on accounts held by U.S. taxpayers in other countries. It requires U.S. financial institutions to withhold a portion of certain payments made to Foreign Financial Institutions (FFIs) who do not agree to identify and report information on U.S. account holders. Governments have the option of permitting their FFIs to enter into agreements directly with the IRS to comply with FATCA under U.S. Treasury Regulations or to implement FATCA by entering into one of two alternative Model IGAs with the United States.
More specifically, Lithuania and the United States signed a Model 1A Agreement. Under this agreement, FFIs in Lithuania will report the information required under FATCA about U.S. accounts to the Lithuanian Government, which in turn will report the information to the IRS. This agreement is reciprocal, meaning that the United States will also provide similar tax information to the Lithuanian Government regarding individuals and entities from Lithuania with accounts in the United States.Back to News
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