This blog was last updated on June 27, 2021
Since the holidays, there have been changes all around the world with regards to FATCA. Here is a quick recap compiled from our expert compliance and research team of the latest updates that have been issued from different jurisdictions: Portugal Extends Reporting Due Date for Tax Year 2014 Portugal extended its Tax Year 2014 reporting due date to March 31, 2016. However, Portugal has yet to pass Regulations and Guidelines for FATCA reporting. 15FACTA Explanatory Notes Released by Hungary Hungary recently released Explanatory Notes for 2015 FATCA Reporting. The Explanatory Notes, which include a June 30, 2016 due date, discuss the following:
- Data submission;
- Specific reporting directions
- Corrections
Spain Issues Guide on How to Respond to FATCA Error Notifications Spain released a Guide on how to respond to FACTA error notifications, therein proposing a four step process to responding to such notices:
- Understand the mistake that was cited Errors reported to Spain are sent from the IRS. These errors are referred to as “registry errors” and may be caused by issues such as duplicate records or incomplete fields (i.e. missing TIN)
- Check the data sent that generated the error
- Correct the error Once the registered user has understood the error sent to Spain’s Agencia Tributaria and relayed to the IRS, the bank must proceed to correct this error. This can mean:
- Completing any information in any XML tag with FATCA message information that it added incorrectly or did not originally provide; ii. Removing any duplicate records; and iii. Completing the CorrDocRefID properly
- Respond to the error, sending the corrected information back through Agencia Tributaria’s web service
IRS Publishes Final Instructions for Form 8966 The IRS has recently released its instructions for Form 8966. Form 8966 is for participating financial institutions to report information about accounts held by a specified US person, a passive NFFE with a substantial US owner, recalcitrant accounts, and payments made to a non-participating financial institutions. The IRS made minimal changes to the Final Instructions from the Draft Instructions released earlier in the month. At the top of the form, a box has been added so that the filer can indicate that it has no accounts to report. Please note, this box is optional except for Direct Reporting NFFEs and Sponsoring Entities.
- Part I, line 1b and Part I, line 1a have been renumbered. There are specific instructions that detail which code to use. Again, please note, this line is only required to be filled if the filer is a Direct Reporting NFFE or a Sponsoring Entity.
- In Part II, line 1b, the filer will now indicate, by checking the proper box, if the account holder or the payee is an individual or an entity.
- In Part II, line 5, the check box for Direct Reporting NFFE has been removed. The filer should enter the applicable filer category code at the top of the form.
- In Part IV, line 3b, a check box has been added for accounts that were closed during the year. Please note, this line is completed only by filers that are FFIs and is option for 2015
US Signs Competent Authority Arrangements with Belgium, Finland, Germany, and the Netherlands This week the IRS reached Competent Authority Arrangements with the competent authorities of Belgium, Finland, Germany, and the Netherlands. The purpose of the intergovernmental agreements is to articulate the necessary rules and procedures for each of the countries to exchange reportable information under FATCA. The Arrangement mostly concern themselves with issues between each country’s competent authority, such as when and how the information exchange will take place, the duty to enforce the provisions of the IGA, and the obligation to keep information confidential, amongst others. Sign up for the Sovos blog and our monthly newsletter to get these and other important updates concerning FATCA, CDOT, and CRS.
