On July 12, 2013, the Internal Revenue Service (IRS) issued Notice 2013-43, which extended the implementation of certain provisions of the Foreign Account Tax Compliance Act (FATCA) by six months and eliminated reporting on U.S. accounts for 2013. The Notice also provided additional guidance for foreign financial institutions (FFIs) located in jurisdictions that have signed intergovernmental agreements (IGAs). The U.S. Department of Treasury and the IRS intend to amend the regulations under sections 1471–1474 of the Internal Revenue Code (the Regulations) to reflect the extensions. Prior to the issuance of the amended Regulations, taxpayers may rely on Notice 2013-43.
The Regulations provided for a phased implementation of FATCA withholding, beginning on January 1, 2014. The new deadlines extend the start of withholding, which now is scheduled to begin on July 1, 2014.
The IRS’s registration website, the FATCA portal, will open on August 19, 2013. Until December 31, 2013, a financial institution may enter and modify information, without the information being regarded as final, thus allowing financial institutions to become familiar with the registration process. In order to avoid FATCA withholding beginning on July 1, 2014, an FFI must finalize its registration by April 25, 2014. Global Intermediary Identification Numbers will not be issued until 2014.
Participating FFIs will not need to file reports regarding U.S. accounts maintained during 2013. Rather, the first reports must provide information about U.S. accounts maintained during 2014. These reports must be filed by March 31, 2015.
Treasury will maintain on its website a list of IGAs that will be treated as in effect for FATCA purposes, which will include jurisdictions that have signed but not brought into force IGAs.
Caitlin Gunther, associate in McDermott's New York office, also contributed to this article.