On January 17, 2013, the Department of the Treasury (“the Treasury”) and the Internal Revenue Service (the “Service”) issued final regulations (the “Regulations”) under Sections 1471 through 1474 of the Internal Revenue Code of 1986, as amended (the “Code”)—commonly referred to as the Foreign Account Tax Compliance Act (“FATCA”). The Regulations represent a significant departure from the proposed regulations that were issued on February 8, 2012 (please see our February 2012 Client Alert for a discussion of the proposed regulations). The Regulations do not address all of the issues raised by FATCA (including, in particular, the definition of “foreign passthru payments”). This Alert summarizes a number of the principal changes in the Regulations that may be relevant in Bank Finance, Capital Markets and Private Equity transactions. This Alert is the first in a series. Subsequent alerts will be tailored to affected industry groups.
Intergovernmental Agreements -
In February, the Treasury, in acknowledgement of the serious conflict of law issues FATCA raised, announced a framework for intergovernmental cooperation in effecting FATCA’s aims. Since February, the Treasury and the Service have introduced two model intergovernmental agreements (“IGAs”) to ensure effective implementation of FATCA. The Regulations have been drafted to complement and coordinate with these agreements.
Please see full alert below for more information.
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Topics: Capital Markets, Documentation, Exemptions, FATCA, Foreign Banks, Grandfathered Obligations, Intergovernmental Agreements, IRS, Private Equity, U.S. Treasury
Finance & Banking Updates, International Law & Trade Updates, Tax Law Updates
DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.
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