30 June 2022 - Events
On July 12, the Internal Revenue Service announced revised timelines in connection with the staged implementation of the various due diligence, verification, withholding, and reporting requirements contained in IRC sections 1471 – 1474, commonly known as the Foreign Account Tax Compliance Act, or FATCA. Broadly speaking, FATCA imposes a 30% withholding on payments of US source investment income to non-US entity payees absent a certification from such payees as to the identity of their US owners or accountholders, if any.
The announcement, set forth in Notice 2013-43 (the “Notice”), provided that the FATCA registration Portal, which is to be the primary medium through which foreign financial institutions will demonstrate their FATCA compliance so as to avoid the aforementioned 30% withholding, would be available on August 19, 2013. The registration Portal is now available at www.irs.gov/fatca, along with related instructions and other materials.
A draft of the paper analogue to the registration Portal, the IRS Form 8957, has been released, along with accompanying instructions, but IRS recommends that participating financial institutions register via the online Portal and not via the paper filing. Nonetheless, the instructions to the Form 8957 provide details as to the types of information that foreign financial institutions will need so as to complete the registration on the Portal. A draft of the IRS Form 8966, which will be the annual reporting form for participating foreign financial institutions and withholding agents, has likewise been released, but without accompanying instructions.
A participating financial institution will be able to access its online account on the Portal to modify or add registration information in draft form until December 31, 2013. This period of time is intended to allow registrants to familiarize themselves with the Portal, input preliminary information and refine that information. Registrations may be finalized on ot after January 1, 2013.
The IRS has advised that it will post a list of participating foreign financial institutions by June 2, 2014, and will update the list on a monthly basis thereafter. To ensure inclusion in the June 2014 list, a foreign financial institution will need to finalize its registration by April 25, 2014.
So, to ensure inclusion on the initial published list of participating foreign financial institutions, a participating foreign financial institution may finalize its registration on the Portal as soon as January 1, 2014 (and will have the opportunity to input information on the Portal in draft form until such date) but no later than April 25, 2014. Upon the finalization of a participating foreign financial institution’s registration, IRS will provide the financial institution with an acceptance notice and a global intermediary identification number (GIIN).