FATCA Updates - July 2013 Publication

 

The Foreign Account Tax Compliance Act (“FATCA”) Update

 

On July 12, 2013, the U.S. Internal Revenue Service (“IRS”) issued Notice 2013-43 which delayed the registration requirements for FACTA by six months. Foreign Financial Institutions (“FFI”) will now have until July 1, 2014 to register with the IRS instead of the original deadline of January 1, 2014. An FFI has until July1, 2014 to implement FATCA procedures for opening new accounts. An FFI will have access to the FACTA website beginning on August 19, 2013 in order to begin inputting the required information, but will not be able to finalize its FATCA registration until January 1, 2014. Any FFI that intends to be on the first IRS FFI List will need to finalize its registration by April 25th, 2014.

 

Withholding information will not be required for U.S.-source income payments made prior to July 1, 2014. Withholding documents, such as IRS Forms W-8BEN and other Forms W-8, which would have originally expired on December 31, 2013, will now be valid until June 30, 2014.

 

The unexpected postponement provided by the IRS will allow additional time for FFI’s to strengthen their information systems and procedures surrounding document management. The delay in reporting requirements should not be viewed merely as an opportunity to postpone a firm’s focus on FACTA for six months, but instead as an opportunity to fine tune its current FACTA program that was scheduled to meet the January 1, 2014 deadline.

 

IRS Notice 2013-43 can be found via the following link: Foreign Account Tax Compliance Act.

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