PRACTICAL AND STRATEGIC INSIGHT FROM:
Malcolm Powell
MORGAN STANLEY
Karlheinz Moll
SPIROCO CONSULTING
David Cafferty
SAXO BANK DUBAI
Bachir Al Nakib
INDUSTRIAL AND COMMERCIAL
BANK OF CHINA
Matthias Geurts
DEUTSCHE BANK
The Foreign Account Tax Compliance Act (FATCA) was enacted in 2011 as part of the United States Government’s Hiring Incentives to Restore Employment (HIRE) Act and is an important development in the U.S.’s efforts to combat tax evasion by U.S. persons holding investment in offshore accounts.
Under FATCA, U.S. taxpayers holding financial assets outside the United States are required under U.S. Federal Law to report these assets to the IRS, and it is necessary for foreign financial institutions to enter into disclosure compliance agreements with the U.S. Treasury, and all non-financial foreign entities (NFFEs) must report and/or certify their ownership to be subject to the same 30 percent withholding.
HOW ARE YOU AFFECTED?
Financial institutions are required to report directly to the IRS certain information about financial accounts held by U.S. taxpayers, or by foreign entities in which U.S. taxpayers hold a substantial ownership interest.
According to a recent survey by KPMG, Finance and Tax Executives in the banking industry expect significant increases in compliance costs as a result of FATCA, with account identification requirements posing the most significant compliance challenges.
KEY STATISTICS:
- 55% of surveyed banking executives expect compliance costs to increase significantly under the FATCA System
- 73% indicated that it would be difficult for their businesses to comply with FATCA due to account identification requirements
- 41% of banking executives indicated their operations division would have the hardest time preparing for FATCA
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KEY COMPLIANCE DATES:
- 31 December 2011: IRS to issue proposed regulations
- 18 March 2012: Last day to issue grandfathered obligations
- Summer 2012: IRS to issue final regulations
- 30 June 2013: Deadline to enter into FFI agreement to avoid being withheld on from 1 Jan, 2014
- 1 Jan 2014: FATCA withholding begins on US sourced dividends and interest (and certain other income)
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TIME CRITICAL TOPICS:
- Comprehensive Understanding Of How FATCA Affects Foreign Financial Institutions In The Middle East
- FATCA Requirements And Determining Who Is A U.S. Person Or Entity And How Your Organisation, Operations And Services Will Be Affected
- Running A FATCA Project From Concept To Implementation
- FATCA Reporting Requirement Guidance For FFIs
- Account Documentation Issues Arising From FATCA Requirements
- The New Role Of The Qualified Intermediary
- A U.S. Law With Far Reaching Effects On Data Protection
- Exemptions And Fund Specific Provisions Of FATCA
- Implications Of The New Identification Requirements For New Accounts For Anti Money Laundering And Know Your Customer Requirements
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