FATCA UPDATE

By Armin Gray* 

IRS PUBLISHES 1ST FFI LIST

On June 2, implementation of the Foreign Account Tax Compliance Act (“FATCA”) reached another milestone. On that date, the IRS published its first list of foreign financial institutions (“FFI’s”) that have registered with the IRS to show intent to comply with FATCA and have received a Global Intermediary Information Number (“GIIN”) to document that compliance. The IRS list is important since U.S. withholding agents who are being asked by FFI’s not to remit the 30% withholding tax imposed under FATCA must first obtain a GIIN from the FFI and then confirm on the IRS published list that the GIIN is accurate and in full force.

More than 77,000 FFI’s appear on this first list and include foreign affiliates of some of the U.S.'s largest financial institutions. Among those financial institutions are Bank of America, JPMorgan Chase, Merrill Lynch, and Franklin Templeton.

Withholding agents and others looking to search the website are given three options. First, the GIIN of an FFI can be entered to see if it is accurate and has not been revoked. Second, the name of the FFI can be entered. If the full name of the FFI is not known, the website allows entry of part of the name and will then show all FFI’s whose name includes the entry so that the desired FFI can then be found. Third, the website allows entry of the country of the FFI or its branch; this list will produce the most options, requiring the most review.

The website will now be updated each month to add the names of new FFI’s that agree to participate in the FATCA program or are registered deemed compliant FFI’s that fit within one of the exceptions to full compliance. The list will also be updated to remove the names of any FFI whose FATCA compliant status may have been lost.

IRS UPDATES FATCA FAQs

On May 29, the IRS updated its FATCA FAQs by addressing the protocol for a taxpayer whose registration under FATCA is put into “registration under review” status. The IRS said if a taxpayer's registration status is noted as being under review, the taxpayer should contact e-Help at 866-255-0652 and indicate that status. In addition, the taxpayer should provide the name of the financial institution and its FATCA identification and the name, telephone number, and e-mail address of either the FATCA responsible officer or a point of contact.

NEW I.G.A. COUNTRIES ADDED

The, Antigua and Barbuda, Belarus, Azerbaijan, Barbados, Georgia, Liechtenstein, New Zealand, Paraguay, Seychelles, Solvenia, St. Kitts and Nevis, St. Lucia, and St. Vincent and the Grenadines, Turkey, Turkmenistan, Turks and Caicos Islands, United Arab Emirates, have entered into intergovernmental agreements (“I.G.A.’s”) or I.G.A.’s in substance under FATCA The countries listed above, except Paraguay which signed a Model 2 I.G.A. in substance, agreed to Model 1 I.G.A.’s or Model 1 I.G.A.’s in substance.

At this time, the countries that are Model I partners by execution of an agreement or concluding an agreement in principle are:

Antigua and Barbuda
Belarus
Australia
Azerbaijan
Bahamas
Barbados
Belgium
Brazil
British Virgin Is.
Bulgaria
Canada
Cayman Islands
Colombia
Costa Rica
Croatia
Curacao
Czech Republic
Cyprus
Denmark
Estonia
Finland
France
Georgia
Germany
Gibraltar
Grenadines Guernsey
Hungary
Honduras
India
Indonesia
Ireland
Isle of Man
Israel
Italy
Jamaica
Jersey
Kosovo
Kuwait
Latvia
Liechtenstein
Lithuania
Luxembourg
Malta
Mauritius
Mexico
The Netherlands
New Zealand
Norway
Panama
Peru
Poland
Portugal
Qatar
Seychelles
Singapore
Slovak Republic
Slovenia
St. Kitts and Nevis St. Lucia
St. Vincent and the Grenadines
South Africa
South Korea
Spain
Sweden
Romania
The U.K.
Turkey
Turkmenistan
Turks & Caicos Is.
UAE

The countries that are Model II partners are: Armenia, Austria, Bermuda, Chile, Hong Kong, Japan, Switzerland, and Paraguay.

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* The following article was published in Insights, by Ruchelman P.L.L.C.  Insights was originally designed, created, and edited by Armin Gray. Kyu Kim of Kyu & A LLC, a design company, substantially assisted in its design as well. Co-authors originally included Philip Hirschfeld, who substantially contributed to the article. We thank them for their support.