The U.S. Treasury Department and the Internal Revenue Service said Wednesday that the governments of the U.S. and Denmark have reached a bilateral agreement to implement the Foreign Account Tax Compliance Act to improve international tax compliance.
FATCA, which was included as part of the HIRE Act of 2010, requires foreign financial institutions, including hedge funds, to disclose the assets of U.S. taxpayers to the IRS. To help encourage foreign banks to implement the controversial provisions of the law, the U.S. has been negotiating agreements with foreign governments to provide information on their citizens to their tax authorities as well. So far, the U.S. has negotiated model agreements with five other countries—the United Kingdom, France, Germany, Italy and Spain—and signed a deal with the United Kingdom. Denmark is now the latest country to reach an accord on FATCA with the U.S.
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