Notice 2013-43, an advance copy of which was released today, revises the timeline set by the FATCA final regulations for certain elements of due diligence, tax withholding, and reporting under Chapter 4 of the Internal Revenue Code, the Foreign Account Tax Compliance Act known as FATCA. Notice 2013-43 will be officially published on July 29.
Below is an overview on the items that are affected by this change:
– Withholding: A six-month extension of the date on which withholding will begin. Instead of January 1, 2014, withholding agents generally will be required to start withholding on FATCA withholdable payments made after June 30, 2014. See Notice 2013-43 for details.
– Preexisting Accounts: The definition of the term “preexisting account” will be modified to generally mean accounts, instruments or contracts that are outstanding on June 30, 2014 (instead of on December 31, 2013). Deadlines for completing due diligence on preexisting obligations are postponed for six months. See Notice 2013-43 for details.
– New Account Opening Procedures: Withholding agents generally will be required to implement new account opening procedures in compliance with FATCA rules by July 1, 2014 (instead of January 1, 2014). See Notice 2013-43 for details.
– Expiring Forms W-8: For purposes of withholding under the existing rules of Chapter 3 of the I.R.C., withholding certificates and documentary evidence that would otherwise expire on December 31, 2013, will expire instead on June 30, 2014 (though as is always the case a change in circumstances could render the certificate of documentary evidence incorrect or unreliable).
– FFI Registration: The timeline for foreign financial institutions to register as (among other things) participating FFIs is also extended, and the registration portal is expected to open on August 19, 2013.
– GIINs: Consistent with the extension of FFI registration, the IRS will not issue any GIINs (Global Intermediary Identification Numbers) in 2013. Instead, IRS expects to begin issuing GIINs as registrations are finalized in 2014.
– FFIs in IGA Counties: Financial institutions operating in jurisdictions that have signed an intergovernmental agreement (IGA) with the U.S. for the implementation of FATCA will be treated as having an IGA in effect if the jurisdiction is listed on the U.S. Department of Treasury website. This will allow reliance on IGAs where the jurisdiction has signed an IGA but has not yet brought the IGA into force. The list is can be found by clicking here.
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