The agreement, signed by Finance Minister Uroš Čufer and US Ambassador to Slovenia Joseph Mussomeli, falls within the purview of the US Foreign Account Tax Compliance Act (FATCA).

Under the deal, Slovenian financial institutions will report certain information to the Tax Administration, which in turn will report to the US Internal Revenue Service (IRS).

The information exchange will be based on existing agreements on the avoidance of double taxation and prevention of income and property tax evasion.

The agreement will reduce the workload of financial institutions in Slovenia and enhance compliance with tax regulations, Minister Čufer was quoted as saying in the Finance Ministry's press release.

The agreement must still be confirmed by the National Assembly.

FATCA is a US federal law that targets tax non-compliance by US taxpayers with foreign accounts, according to the IRS.

It requires US citizens, including individuals who live outside the United States, to report their financial accounts held outside of the country.