The IRS has agreed to delay by six months the implementation of
the key provisions of the Foreign Account Compliance Act
("FATCA"). Notice 2013-43, which announced the delay,
also includes relief for foreign financial institutions
("FFIs") located in countries that have entered into
Model 1 type intergovernmental agreements ("IGAs") with
the IRS1. Treasury has concluded such IGAs with a number
of countries, but the IGAs have not yet come into force due to hold
ups in the Senate Foreign Relations Committee. Under the Notice,
any FFI that is located in a country that is listed by the IRS as
having signed an IGA will be permitted to register and obtain a
global intermediary identification number ("GIIN") as a
registered deemed compliant FFI even if the IGA is not yet in
force. As a reminder, Canada and the United States announced last
November that they are in discussions to enter into an IGA by the
end of this year, but that has not yet occurred. The Notice also
makes the following changes:
The FATCA withholding requirements will come into effect for
withholdable payments made on or after July 1, 2014 (instead of
January 1, 2014).
Grandfathering for preexisting obligations will be extended to
exempt obligations entered into prior to July 1, 2014.
The FATCA online registration portal is now projected to open
on August 17, 2013 (previously the IRS had planned to open it by
Registration applications can only be finalized beginning
January 1, 2014, and will not be processed by the IRS before then.
Any registrations that are submitted before that date can be freely
amended until the end of 2013.
The IRS will make available a list of registered FFIs and their
GIINs on June 2, 2014, and will update the list thereafter on a
In order to ensure inclusion on the initial list (which is
necessary to avoid withholding on payments received on July 1,
2014), an FFI's registration must be submitted no later than
April 25, 2014.
Reporting on U.S. accounts will begin March 31, 2015, with
respect to the 2014 calendar year (the IRS is eliminating reporting
for the 2013 calendar year).
1 Model 1 agreements provide for information to be
collected by the foreign government from its FFIs, with the foreign
government then exchanging that information with the United
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While there is overlap in the work that Canadian tax lawyers and tax accountants carry out on behalf of their client, the news that the Canada Revenue Agency has seized several files from a Halifax branch of Grant Thornton . . .
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