Over the past week, countries around the world continued to release more information about and changes to FATCA, CRS, and CDOT regulations. Take a look at our roundup below of the latest global updates, compiled by our Sovos team of tax experts.
Finland Publishes CRS & DAC2 Detailed Instructions (Finnish Draft)
Finland recently published a draft version of detailed instructions for CRS & DAC2 reporting. Please note this document is available in Finnish only at this time (as of June 30, 2016). As a reminder Finland is an early adopter jurisdiction for CRS utilizing the CRS schema, and reporting is due for the first time on March 31, 2017.
Cyprus Releases 2016 FATCA Registration and Data Submission Guide, Sample Nil Report
Cyprus recently released two updates relating to FATCA reporting in 2016.
- 2016 FATCA Registration and Data Submission Guide: This guide was released in English, and covers the step-by-step process of registering and submitting reporting data through the Cyprus government portal, Ariadni. To view this guide in full, please click here.
- Sample Nil Report: Cyprus also released a copy of a sample nil report, which can be found by clicking here.
IRS Releases Updated FATCA Notification XML (v2.2)
The IRS has released the FATCA Notification XML v2.2 file, which contains XML and XSD files for various notifications that filers may expect to receive regarding any FATCA transmittals to the IRS. Specifically, there are XML files for a Valid File Notification, Field Level Error Notification, Record Level Error Notification, and File Error Notification. There are also XSD files for a Base FATCA Notification, FATCA Valid File Notification, and FATCA File Error Notification. These new files will be effective relative to transmittals conducted on or after July 11, 2016. Download the zip file containing the new notification files here.
Cyprus Releases Communication on FATCA Submission Requirements
Cyprus recently released a communication regarding FATCA submissions for reporting year 2015. Included in this communication is a brief summary of the registration and reporting process, the notification process upon receipt of said reports, and how users can check their submissions through the Ariadni web portal.
South Africa Issues Revised AEOI Specifications for FATCA and CRS (Version 2.0.0)
The South African Revenue Service has released an updated version of its AEOI specifications, which includes information relative to both FATCA and CRS filing. The following significant revisions should be noted for future filing:
- Addition of CRS Account Holder Types
- CRS101: Passive Non-Financial Entity with one or more controlling person that is a Reportable Person as defined under CRS regulations.
- CRS102: CRS Reportable Person as defined in the CRS regulations.
- CRS103: Passive Non-Financial Entity that is a CRS Reportable Person as defined in CRS regulations.
- Addition of FATCA Account Holder Types
- FATCA101: Owner-documented FI with specified US owner(s) as defined in the IGA.
- FATCA102: Passive Non-Financial Entity with substantial US owner(s) as defined in the IGA.
- FATCA103: Non-participating FFI as defined in the IGA.
- FATCA104: Specified US person as defined in the IGA.
- The structure for files submitted to SARS has been amended to include two additional sections: “Account Holder ID Record” and “Controlling Person ID Record.” These sections should not contain any records in a Nil transmittal.
- The publication includes a file layout for a Responsible Entity, showing linking relationships and listing diverse rules for each section.
- Controlling persons may either be individuals or partnerships.
- There have been several changes and updates to the Field Specifications for transmittal Records. Some transmittal Records contain new and additional fields that were not present in the prior publication, while other fields from the prior publication have now been removed or replaced. The condition rules, data types, field lengths, and data validations for many of the preexisting fields have been revised. The Field Specifications are located on Pgs. 23-134, and most of the changes are highlighted in blue.
- New Records and Field Specifications
- Account Holder ID Record: Conditional record—if Identification Number Indicator (Field 83) = Y, then one or more record must exist for each related Account Holder Indicia Nationality TIN record. Six new fields have been added for the reporting of this information, and field No. 84 and 85 (Identification Number and Identification Type) are now located within this record.
- Controlling Person ID Record: Conditional record—if Identification Number Indicator (Field 147) = Y, then one or more record has to exist for each related Controlling Person TIN Jurisdiction Nationality Record. Six new fields have been added for the reporting of this information, and field No. 148 and 149 (Identification Number and Identification Type) are now located within this record.
- Addition of Indicator Reason Codes
- Code 001: Account holder contacted but no response received
- Code 002: Account holder not co-operate to provide data
- Code 003: Unable to contact account holder despite reasonable efforts
- Code 004: Account holder still to be contacted due to timing of identification
Mexico Releases Testing Guides
Mexico has added testing guides to its FATCA website. The testing guides of for the “Web Service,” “SFTP,” and “Security Requirements.
India Delays Due Diligence Reporting on High Value Accounts
This week, India announced that it will extend the due date for FIs to review on pre-existing high value individual accounts. The new due date is December 31, 2016, whereas the original date was June 30, 2016.
Vietnam and United States Sign Memorandum of Understanding Pursuant to FATCA Agreement
The competent authorities of Vietnam and the United States have executed a memorandum of understanding, which serves to clarify and expound upon certain provisions in the original FATCA IGA. The memorandum establishes the following points relative to the IGA:
- “Investment Certificate” means an investment product, similar to a certificate of deposit, that offers a fixed or guaranteed return.
- “Trust” means an arrangement created by will or inter vivos declaration whereby a trustee takes title to property for the purpose of conserving it for beneficiaries.
- The meaning of terms not defined in the agreement will conform to the meaning under the tax laws of the Party applying the agreement at the time which it is applied.
- The first exchange of information is to take place the first September 30th that occurs after the IGA enters into force.
- “Applicable penalties” will be applied by Vietnam’s competent authority to the extent possible under current Vietnamese domestic law.
- “Standing instructions” means current instructions provided by the account holder or its agent that will repeat without further instruction being provided.
- “Qualified intermediary” will have the meaning set forth by U.S. Treasury regulations; in other words, an intermediary that is a party to a qualified intermediary withholding agreement with the IRS and which meets other conditions set forth in U.S. Treasury laws and administrative guidance.
- Vietnamese Policy Banks (including Social Policy Bank), People’s Credit Funds (including the Co-operative Bank of Vietnam), and Microfinance institutions are to be treated as deemed-compliant FFIs or exempt beneficial owners to the extent that they satisfy the conditions of the IGA and its annexes.
- For securities registered in the Vietnam Securities Depository—held by or through one or more Reporting Vietnamese Financial Institutions—the relevant Financial Accounts should be treated as being held by Reporting Vietnamese Financial Institutions, which will be responsible for any reporting required with respect to those Financial Accounts.
- Entities acting as a Vietnam Securities Depository may report on behalf of other Financial Institutions.
Guernsey Releases Bulletin 2016/5
Guernsey recently released Bulletin 2016/5, which discusses the treatment of sponsors by the Information Gateway Online Reporter (IGOR). More specifically, the Bulletin outlines how Sponsored and Sponsoring entities should deal with the GIIN requirement (or lack thereof) when reporting through IGOR under both FATCA and CDOT regimes, and the relevant procedures tied to this process.
Curacao Extends FATCA Reporting Deadline
Curacao recently published a blog post on their EOI community website which extends their deadline for Tax Year 2015 FATCA reporting to July 1, 2016. To view this blog post update, please follow this link (requires users to sign up for a free account with a valid e-mail address).
