The US Treasury and IRS have recently issued Announcement
2014-17 (the "Announcement"), which
essentially clarifies two important aspects of the implementation
of FATCA. The Announcement can be viewed
Firstly, jurisdictions listed on the IRS/Treasury websites as
having an inter-governmental agreement
("IGA") in effect will also now include
jurisdictions that have reached agreement with the US on the
substantive terms of an IGA, before 1 July 2014, and have consented
to be included on the Treasury and IRS list, even though the IGA
has yet to be signed.
The affected jurisdictions can be viewed here, which includes the British Virgin
Islands ("BVI") and Brazil.
This is of significance to those Financial Institutions
domiciled in such listed jurisdictions as they will be permitted to
register on the FATCA registration website, and certify their
status to a withholding agent, as if they were domiciled in a
jurisdiction with a signed IGA. Reporting Financial
Institutions in Model 1 IGA jurisdictions will also be able to take
advantage of the effective extended deadline for GIIN registration
until 31 Dec 2014 (see further below).
It is also of relevance to those Financial Institutions that are
part of wider international groups, who may be impacted by the
Expanded Affiliated Group provisions under the US FATCA
Regulations, or the Related Entity provisions under an IGA, as such
entities will now be granted the status of deemed compliance, which
would be advantageous to status of the wider group.
Treasury expects to add jurisdictions as they consent to
inclusion on the list and additional agreements in substance are
reached. Jurisdictions that reach agreements in substance on
or after 1 July 2014 will not be included in the list of
jurisdictions that are treated as having an IGA in effect until the
IGA is signed.
Secondly, the Treasury/IRS have split the former issuance date
of the Global Intermediary Identification Number
("GIIN") list and extended the deadline
by which registrations must be made, in order to be on the GIIN
list as of 1 July 2014.
The IRS will be publishing the first GIIN list on 2 June 2014,
for which the deadline of registration is 5 May 2014. The IRS
will be publishing a second GIIN list on 1 July 2014, for which the
deadline of registration is 3 June 2014. In essence, this
means the original date of registration by 25 April for inclusion
on the 1 July GIIN list has been extended by an additional 39
The Announcement reminds withholding agents that they will have
an additional 90 days to verify that the GIIN of a payee appears on
the GIIN list, before they will be treated as having reason to know
that the Chapter 4 status of the payee is unreliable or
Perhaps more noteworthy is the serious reinforcement made by the
IRS in the Announcement in relation to the fact that a withholding
agent does not need to obtain a GIIN from a Reporting FI in a Model
1 IGA jurisdiction (which now includes Ireland, the Cayman Islands
and the BVI) for payments made before 1 January 2015. See US
FATCA Regulations § 1.1471-3(d)(4)(iv)(A). This rule is
highlighted three times in the Announcement.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
This webcast focuses on the impact FATCA and CRS are having on structured finance vehicles set up in the BVI, Cayman Islands and Ireland and covers in detail the impending reporting and notification deadlines in each of these jurisdictions.
Maltese tax law provides for rules which grant beneficiaries referred to as ‘Highly Qualified Persons' to be taxed at a reduced rate of tax of 15% on their employment income, provided certain conditions are satisfied.
Non-U.S. individuals making direct investments in the United States face a bewildering U.S. tax regime.
Some comments from our readers… “The articles are extremely timely and highly applicable” “I often find critical information not available elsewhere” “As in-house counsel, Mondaq’s service is of great value”
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).