The IRS announced a second 90 day filing extension for the Foreign Account Tax Compliance Act (FATCA), extending the time to file 8966 information to the IRS to 9/27/15. This additional extension further highlights the complex challenges of reporting globally for the first time as the world races towards the Common Reporting Standard (CRS) beginning in 2016.
The original IRS FATCA deadline on March 31, 2015 was automatically extended to June 29th as significant reporting challenges began to surface for those obligated to report. The announcement of this additional extension illustrates the continued challenges of reporting directly to the IRS out of disparate systems not intended to generate this kind of reporting.
In addition to the IRS delays, there are other signals of continued challenges that have surfaced as institutions and countries drive to complete their FATCA reporting:
- The United Kingdom changed their transmittal 12 days before their Intergovernmental Agreement (IGA) specified deadline to better accommodate the first year of FATCA reporting.
- The Cayman Islands had two separate extensions within 30 days of their initial IGA deadline due to challenges with being able to not only accept, but process the data as well.
- Many additional countries have delayed their initial reporting deadlines throughout the spring, including Malta, British Virgin Islands, Italy, and Luxembourg due to similar challenges the Cayman Islands were experiencing.
FATCA is the first step towards a global reporting environment that is going to be expanded by CRS. The challenges that are driving last minute FATCA changes and extended deadlines will no doubt increase exponentially as countries and institutions prepare to exchange data with upwards of 100 different jurisdictions.
In addition, FATCA has taken over five years to get to the first filing deadlines. CRS, which represents a significant leap toward a true Automatic Exchange of Information (AEOI) reporting, has an ambitious goal to be implemented in nearly half of the time.
For organizations looking to minimize spend and risk, meet the required deadlines, and focus on their business goals (and not tax compliance), every step like FATCA in their approach to global tax reporting should build toward CRS. Even if there is a minimal reporting impact to your institution this year, utilizing the additional time to prepare for continual implementations in a long-term rapidly changing global environment will be essential to comply.
FATCA Deadline Extension
Due to the terms of applicable IGA’s, this extension is only for those filing directly to the IRS. To take advantage of this 90 day extension, organizations are required to apply as a necessary step to extend their deadline.
For more information on the most recent FATCA deadline Extension, please visit the following links:
