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Updated pub provides guidance on FATCA online registration process

January 29, 2014

IRS has updated Publication 5118, Foreign Account Tax Compliance Act (FATCA) User Guide, to reflect changes since its initial publication last summer. In general, the User Guide provides instructions for completing the registration process online, including what information is required, how registration will vary depending on the type of financial institution, and step-by-step instructions for answering each question.

Background. On Mar. 18, 2010, the Hiring Incentives to Restore Employment Act of 2010 (P.L. 111-147) added Chapter 4 (Code Sec. 1471 through Code Sec. 1474 , the “Foreign Account Tax Compliance Act” or FATCA) to the Code. Chapter 4 requires withholding agents to withhold 30% of certain payments to a foreign financial institution (FFI) unless the FFI has entered into a “FFI agreement” (the final version of which was released late in 2013, see Weekly Alert ¶  1  01/02/2014) with IRS to, among other things, report certain information with respect to U.S. accounts. (The withholding rules are essentially a mechanism to enforce new reporting requirements.) FFIs that have entered into FFI agreements are referred to as “participating FFIs.” Chapter 4 also imposes withholding, documentation, and reporting requirements on withholding agents with respect to certain payments made to certain non-financial foreign entities. The statutory provisions are generally effective for payments made after Dec. 31, 2012, but their implementation has been delayed and phased in over several years.

IRS issued final FATCA regs on Jan. 17, 2013 that, among other things, provide for a phased implementation of the FATCA requirements over the period beginning on Jan. 1, 2014 and continuing through 2017 (see Weekly Alert ¶  12  01/24/2013, Weekly Alert ¶  11  01/24/2013 , Weekly Alert ¶  17  01/24/2013, Weekly Alert ¶  42  01/24/2013 , Weekly Alert ¶  19  01/24/2013 , and Weekly Alert ¶  13  01/31/2013). Subsequently, in Notice 2013-43, 2013-31 IRB 113, Treasury and IRS provided revised timelines for implementing various FATCA requirements with the goal of a more orderly implementation of FATCA (see Weekly Alert ¶  6  07/18/2013).

In the preamble to the final regs (see T.D. 9610, 01/29/2013), IRS announced that it would create a new FATCA registration website which would serve as the primary way for FFIs to interact with IRS to complete the required registration, agreements, and certifications. In IR 2013-69 (see Weekly Alert ¶  3  08/22/2013), IRS announced that its online FATCA registration system was open for business, effective Aug. 19, 2013. IRS encouraged financial institutions (FIs) to become familiar with the system, create their online accounts, and begin submitting their information. It also said that, starting in January, 2014, FIs would be expected to finalize and submit their registration information and, upon finalization and approval in 2014, registering financial institutions would receive a notice of registration acceptance and be issued a global intermediary identification number (GIIN).

Mechanics of FATCA registration. The newly updated Pub 5118, FATCA User Guide, provides detailed instructions and guidance on the online FATCA registration system. As the guide is over 100 pages long, references to page numbers are provided.

… Eligibility. The User Guide provides a list of entities that are eligible to register, on behalf of themselves and their branches, and the purposes of such registration. (p. 8)

… Website features. In addition to fairly standard features, such as round-the-clock accessibility and the ability to establish an online account, the FATCA registration website also allows FIs to appoint delegates to perform registration tasks, generates automatic notifications when a FI status changes, and issues the GIIN. (p. 9)

… Registration process. The exact registration process depends on the classification of the registering institution, but the general steps are to create an account, complete the relevant parts of the registration form (depending on type of institution and purpose of the registration), submit the form, and receive approval and a GIIN. (pp. 9-13)

… Necessary information. The User Guide provides a checklist of information that a FI will be required to provide in order to complete the online registration form. There is a section of information required for all FIs and additional information required for certain registrants. (p. 17)

… Special registration rules. The User Guide provides special registration rules for certain situations including those involving an expanded affiliated group (EAG), an EAG that has in place a Consolidated Compliance Program under Reg. § 1.1471-4(f)(2)(ii), and FIs that are treated as Reporting FIs under a Model 1 or Model 2 IGA. (p. 18)

… Home page information. A registrant can view its account information and account status on its home page. The account status indicates, for instance, if the registration has been submitted, is incomplete, is under review, or has been approved. The fields on the home page for the GIIN and effective date are populated once the FI is in approved status. The User Guide also indicates how this status can be changed. (pp. 58-68) Guidance is also provided for when a FI is placed in “Limited Conditional” status or when the registration is rejected/denied (pp. 68-69), as well as when a FI chooses to delete its registration (pp. 85-91) or cancel the agreement. (pp. 91-94)

… Glossary. The User Guide provides a comprehensive glossary of FATCA-related terms. (pp. 111-113)

… Country lookup table. An alphabetical list of countries is provided in Appendix E providing the applicable numeric code and which questions must be answered on the registration (for most countries, the answer is “all questions”). (pp. 116-121)