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# Intergovernmental Agreement (IGA)
- URL: https://university.heavnn.io/glossary/intergovernmental-agreement/
- Published: 2026-10-15T09:20:00.000Z
- Updated: 2026-10-15T09:19:59.000Z
- Description: An Intergovernmental Agreement (IGA) is a bilateral treaty-level arrangement under which a partner jurisdiction and the United States implement FATCA account reporting by financial institutions.
- Author: Heavnn
- Tags: #glossary, #Import 2026-10-11 07:56

## What Is an Intergovernmental Agreement (IGA)?

An Intergovernmental Agreement (IGA) is a bilateral treaty-level arrangement under which a partner jurisdiction and the United States implement FATCA account reporting by financial institutions.

*Also known as: FATCA IGA, Model 1 or Model 2 Agreement.*

## How Intergovernmental Agreement (IGA) works

An Intergovernmental Agreement (IGA) is a bilateral agreement which adapts the US Foreign Account Tax Compliance Act to a partner country's legal system, so that local foreign financial institutions identify accounts held by US persons and report them without breaching domestic privacy or banking-secrecy rules. Under a Model 1 IGA, financial institutions report specified information about US accounts to the partner jurisdiction, which in turn passes the data to the IRS on an automatic basis. Under a Model 2 IGA, financial institutions report specified information directly to the IRS, under the partner government's direction. Due-diligence procedures, exempt accounts and reporting details follow each agreement and its annexes, which differ by jurisdiction.

## Intergovernmental Agreement (IGA) vs Common Reporting Standard (CRS)

Unlike the Common Reporting Standard, a multilateral OECD framework for exchange among many jurisdictions, an Intergovernmental Agreement implements one US statute and centres reporting on accounts linked to US persons.

## Example

Illustrative example: A US citizen working remotely opens a savings account in Country A, which has signed a Model 1 IGA. The bank requests a self-certification of US status, flags the account as reportable and sends balance and income details to Country A's tax authority, which forwards the data to the IRS.

## Common misconception

**Myth:** Keeping savings at a bank outside the United States keeps the account out of IRS view.

**Reality:** Through Intergovernmental Agreements, financial institutions in partner jurisdictions report accounts held by US persons either directly to the IRS or through the local tax authority.

## Frequently asked questions

### What is the difference between Model 1 and Model 2 IGA?

Under a Model 1 Intergovernmental Agreement, financial institutions report US account information to the partner jurisdiction, which forwards the data to the IRS; under a Model 2 agreement, institutions report directly to the IRS.

### Why do foreign banks ask about US citizenship?

Banks in jurisdictions with an Intergovernmental Agreement must identify accounts held by US persons for FATCA reporting, so account-opening forms generally include a self-certification of citizenship and tax residence.

## Related terms

- [FATCA (Foreign Account Tax Compliance Act)](https://university.heavnn.io/glossary/foreign-account-tax-compliance-act/) — US statute which every IGA implements locally
- [Common Reporting Standard (CRS)](https://university.heavnn.io/glossary/common-reporting-standard/) — Multilateral reporting standard often confused with IGAs
- [Foreign Financial Institution (FFI)](https://university.heavnn.io/glossary/foreign-financial-institution/) — Institutions bound to report under IGA terms
- [Reportable Account](https://university.heavnn.io/glossary/reportable-account/) — Account category triggering IGA reporting
- [Accidental American](https://university.heavnn.io/glossary/accidental-american/) — US persons abroad often surprised by IGA reporting

## Related guides

- [Global tax reform and US digital nomads](https://university.heavnn.io/global-tax-reform-why-u-s-digital-nomads-should-care/) — Context on reporting regimes affecting US nomads
- [US expat tax reform debate](https://university.heavnn.io/trumps-tax-agenda-reignites-debate-over-u-s-expat-tax-reform/) — US expat taxation and reporting debate

## Sources

- [Model 1 IGA reporting route](https://www.irs.gov/businesses/corporations/fatca-governments?ref=university.heavnn.io)
- [FFI compliance options](https://home.treasury.gov/policy-issues/tax-policy/foreign-account-tax-compliance-act?ref=university.heavnn.io)

*Last verified: 2026-10-08\. This entry is general information, not tax or legal advice; rules vary by country and change over time.*