The IRS recently announced significant modifications to FATCA reporting duties, affecting Chapters 3 and 4 of the Internal Revenue Code. Read more about this update, among others, in this week’s global recap from the Sovos expert compliance and research team. IRS Post Notice 2016-08 Announces Amendments of Chapter 3 and 4 Regulations The IRS posted Notice 2016-08, announcing therein the intention of the Treasury Department and the IRS to amend certain provisions of the regulations under chapter 3 (sections 1441-1464) and chapter 4 (sections 1471-1474) of the Internal Revenue Code to:
- Provide that a participating FFI or a reporting Model 2 FFI will submit its preexisting account certification to the IRS by the same date it is required to submit its first periodic certification of compliance (thereby providing a deferral of the submission date for the preexisting account certification);
- Specify the time period and date for submitting a registered deemed compliant FFI’s periodic certification of compliance and provide guidance to local FFIs and restricted funds concerning their obligation to report preexisting accounts;
- Modify calendar year 2015 transitional reporting rules concerning gross proceeds paid to, or with respect to, a nonparticipating FFI’s account; and
- Permit withholding agents to rely upon electronically furnished Forms W-8 and W-9 collected by intermediaries and flow-through entities.
The announcement notes that the intent of the change is to ease the burdens on FFIs and to address comments regarding certain aspects of the regulations under chapters 3 and 4. Further, the announcement provides that Taxpayers may rely upon the notice prior to the issuance of amended regulations. Treasury Changes FATCA IGA Page The United States Treasury has updated its online FATCA resource center. This website lists each jurisdiction which has signed, or has agreed in substance, to an Intergovernmental Agreement with the United States for the purposes of implementing FATCA. The new website places each jurisdiction in a single table, listed alphabetically with its status, a copy of the IGA (if available), its understandings, and the date that the jurisdiction is treated to having its IGA in effect. US Signs Competent Authority Arrangement with Norway The Kingdom of Norway has recently signed a Competent Authority Arrangement with the United States. The agreement’s purpose is to set out how each country will administer the FATCA reporting scheme, including the timing of the data exchange, how the exchange will take place, and confidentiality requirements, amongst others. The Arrangement is contemplated in the IGA. IRS Releases Draft Form 8-BEN-E and Draft Instructions The IRS has posted a draft Form 8-BEN-E and Draft Instructions. Payees, who are entities and are subject to Chapter 3 withholding, give this Form to a withholding agent to claim an exemption or a reduction on the standard 30% withholding rate. Foreign Financial Institutions also use this Form to request information from their account holders. The Instructions note three changes for the proposed new Form: (1) new checkboxes to satisfy an LOB provision for a treaty claim; (2) new checkbox added to the Chapter 4 statuses; and, (3) new instructions for non-reporting IGA FFIs. To read the draft Form, please click here. To read the draft Instructions, please click here. Saint Lucia Signs Model 1A IGA The United States Treasury Department posted its Intergovernmental Agreement with St. Lucia on its website on January 19, 2016. The Agreement is a Model 1A meaning that St. Lucia will send and receive FATCA information. The St. Lucia page has been updated with this information. Hungary Releases FATCA Financial Institution Database Hungary has released a database containing all of the financial institutions that report under the FATCA agreement. The database is searchable by either Registration Number or Name (Title). Belgium FPS Announces Reporting Due Date for 2014 Information FPS Finance in Belgium announced the reporting date for 2014 information. 2014 information reporting is due to the FPS Finance by April 15, 2016. Previously, Belgium postponed the reporting date. 2015 information reporting remains due to FPS on June 30, 2016. Sign up for the Sovos blog and our monthly newsletter to get these and other important updates concerning FATCA, CDOT, and CRS.
