The widespread reach of FATCA: How will it affect your business?
FATCA’s application to financial institutions is immediately evident and has prompted the industry to action as it prepares to be compliant. However, less understood have been the potential implications of FATCA on nonfinancial multinational corporations. This paper explores its impact and the path forward for nonfinancial multinational businesses.
New FATCA guidance for qualified intermediary, withholding foreign partnership, and withholding foreign trust applicants
Important guidance for entities that are classified as FFIs under FATCA and considering applying for qualified intermediary, withholding foreign partnership, or withholding foreign trust status.
New multilateral action to combat tax evasion
Governments in Europe announce agreement to develop and pilot multilateral tax information exchange arrangements.
IRS releases draft FATCA registration forms and additional information regarding FFI lists
The IRS released draft Form 8957, FATCA Registration, for public review and comment on April 5, 2013. Form 8957, when issued in final form, may be used by foreign financial institutions (FFIs) to register for FATCA purposes. In the IRS release of the draft Form 8957, the IRS reiterated its intention to utilize an on-line registration portal (Portal) for FATCA registration. The Portal is expected to be available in July of this year.
Applying FATCA to captive insurance arrangements: Surprising results may occur
In this Newsbrief, we take a closer look at the potential impact of FATCA on the global captive insurance market.
The insurance industry and FATCA – Moving from assessment to implementation: Top 13 in ’13
This whitepaper explores 13 critical issues that insurance industry executives should take into account in 2013 and beyond as compliance programs shifts from impact assessment to implementation.
The text of the final Foreign Account Tax Compliance Act (FATCA) regulations in an easy to read format
The final FATCA regulations formatted with references is an easy to read format from PwC's Global Information Reporting (GIR) practice. The GIR team has developed this version of the regulations to give tax and compliance professionals what we hope is an easier option to study rules.
Final Foreign Account Tax Compliance Act (FATCA) regulations issued: Let the compliance begin
Stakeholders patiently waiting for guidance regarding the Foreign Account Tax Compliance Act (FATCA) need not wait any longer -- final regulations were issued on January 17, 2013. This Newsbrief describes at a high-level some of the notable distinctions between the proposed and final regulations as well as some essential and necessary actions for stakeholders to think about.
How do the final FATCA regulations impact insurers?
PwC released an earlier Newsbrief on January 18, 2013 highlighting many of the distinctions between the proposed regulations and final regulations, which potentially apply to all industries. To supplement the earlier Newsbrief, this Newsbrief describes the most notable differences between the proposed and final FATCA regulations that will impact insurers.
How do the final FATCA regulations affect asset managers?
The long-awaited final Foreign Account Tax Compliance Act (FATCA) regulations have arrived and, while much analysis still needs to be done, the US Department of the Treasury and the Internal Revenue Service provided welcome relief on a number of key issues for the asset management industry. This Newsbrief highlights key areas for consideration for asset managers (including notable changes from the proposed FATCA regulations) as they set their FATCA implementation agenda for 2013 and beyond.
Taking control of FATCA: Building effective internal controls and certifying compliance
This whitepaper provides an in-depth look of the controls and certification considerations for entities impacted by FATCA. From approach to implementation, the time is right to develop a deeper understanding of the controls sufficient to make periodic certifications to the IRS as needed.
FATCA for Irish financial institutions
On December 21, 2012, the Chargé d’affaires at the US Embassy in Ireland and the Minister for Finance of Ireland signed an intergovernmental agreement (the US-Ireland IGA), for which enabling provisions are due to be enacted into Irish tax legislation in the coming months. The IGA changes the way in which FATCA affects Irish financial institutions.
HMRC issues Draft Guidance Notes - Implementation of International Tax Compliance (United States of America) Regulations 2013
On December 18, 2012, HM Treasury and HMRC released the draft International Tax Compliance Regulations 2013 (“UK Draft Regulations”) to implement the Agreement to Improve International Tax Compliance and to Implement FATCA (“UK-US IGA”). This Newsbrief provides an overview of the key clarifications and gaps and includes an appendix with detailed analysis of, the UK Draft Guidance. A summary of responses to the consultation will be provided in a future Newsbrief.
United States and Ireland sign a bilateral FATCA Intergovernmental Agreement
This Global IRW Newsbrief provides an overview of the United States and Ireland FATCA intergovernmental agreement signed on December 21, 2012. This is the fourth FATCA agreement signed by the United States and closely follows the Model I Agreement issued in July 2012 by the governments of France, Germany, Italy, Spain, the UK and the US.
HM Treasury and HMRC release details outlining the implementation of FATCA in the UK
HM Treasury and HMRC released the draft International Tax Compliance (United States of America) Regulations 2013 (“UK Draft Regulations”) to implement the UK-US IGA, and draft guidance notes on how the Government intends to legislate to deliver the commitments made in the UK-US IGA.
FATCA IGA update: How the Mexico and Denmark agreements compare to the model
The US Department of Treasury signed intergovernmental agreements (IGAs) with Mexico and with Denmark. Although the Articles and Annexes for the Mexico and Denmark IGAs have some differences pertaining to identifying local entities, accounts, and products that are a low risk of US tax evasion.
IRS Chief Counsel issues memorandum regarding a withholding agent's ability to rely on e-mailed or faxed Forms W-8
The Internal Revenue Service Office of Associate Chief Counsel (International) recently responded to a request for assistance to understand under what circumstances is a Form W-8 that is signed with a handwritten signature and electronically transmitted to a withholding agent (for example, as a PDF or facsimile) a form upon which the withholding agent may rely. The informal written guidance provided under Generic Legal Advice Memorandum AM 2012-008 dated August 8, 2012 describes the conditions necessary for a withholding agent to rely on a Form W-8 that is received via fax or e-mail.
Treasury releases second model agreement for implementing FATCA
The US Department of the Treasury recently published the second model intergovernmental agreement for implementing FATCA. In this Newsbrief we analyze the key differences between Models 1 and 2.
FATCA and KYC: Similar yet different
FATCA extends customer due diligence and reporting requirements well beyond what is typically performed for "Know Your Customer" (KYC) purposes. This whitepaper highlights four key challenges that Anti-money-laundering (AML) and KYC professionals should understand as their financial institutions begin to implement FATCA alongside existing account opening and AML/KYC capabilities.
US Treasury expects finalization of more FATCA intergovernmental agreements by year-end
US Department of the Treasury announces it is working with more than 50 countries and jurisdictions around the world to improve international tax compliance and to efficiently and effectively implement the information reporting and withholding tax provisions of the Foreign Account Tax Compliance Act (FATCA).
HMRC guidelines on new UK-US FATCA agreement provide insights and invite comments
Following the release of the UK-US intergovernmental agreement (IGA), HM's Revenue and Customs subsequently released Implementing the UK-US FATCA Agreement Consultation Document, which addresses implementation of the US-UK IGA. The Consultation Document sets forth how the UK government intends to legislate and promulgate new rules consistent with the commitment by both governments to significantly increase the scope of information automatically exchanged. The Consultation Document also seeks views and comments from industry and other stakeholders, and it requests information on the expected costs of complying with the US-UK IGA to inform an impact assessment.
The United States and the United Kingdom sign the first bilateral FATCA intergovernmental agreement
The US Treasury Department and UK's HM Treasury announce signing of the first intergovernmental agreement under FATCA which the UK institutions and products that present a low risk of US tax evasion, making them exempt from FATCA compliance requirements.
The impact of FATCA withholding on real estate companies, funds and joint ventures -- Part 2
This Real Estate Tax Alert focuses on the classification of non-US entities under FATCA and what non-US entities should do to comply with this new regime which is in addition to and does not replace other US information reporting and withholding regimes.
The impact of FATCA withholding on real estate companies, funds and joint ventures -- Part 1
This Real Estate Tax Alert focuses on the classification of US entities under FATCA and what US entities should do to comply with this new regime.
FATCA protocol on derivatives can yield streamlined modifications
International Swaps and Derivatives Association, Inc. (ISDA) releases FATCA protocol on derivatives, which may provide payors with an opportunity to allocate the cost of FATCA Withholding to their counterparties, rather than treat FATCA Withholding as an 'Indemnifiable Tax' for which a payor has responsibility.
The IRS released another preliminary draft Form W-8
On August 14, 2012, the Internal Revenue Service (IRS) released a preliminary draft Form W-8IMY, Certificate of Foreign Intermediary, Foreign Flow-Through Entity, or Certain U.S. Branches for United States Tax Withholding.
Treasury releases model intergovernmental agreement for implementing FATCA
This report provides a summary, and in-depth analysis and observations at a detailed level to compare and contrast the Model Agreement and the proposed regulations, including review of the potential impact of the Model Agreement, and potential challenges that impacted institutions may face with respect to compliance, including considerations for taking on these challenges.
Global IRW Newsbrief: Treasury issues separate joint statements with Japan and Switzerland to facilitate the implementation of FATCA
On 21 June 2012, the governments of Japan and Switzerland each released a joint statement with the U.S. government regarding their intention to explore and negotiate an intergovernmental agreement (“IGA”) to facilitate the implementation of the FATCA.
IRS releases preliminary drafts of form W-8BEN
The IRS (Internal Revenue Service) released to drafts of form W-8BEN which are intended to replace the current versions once FATCA becomes enacted.
Impact of FATCA on multinational corporations that are not in the financial services industry
This document provides a brief overview of FATCA, debunks the common misconception that FATCA only affects entities in the financial services industry, and provides insight into key points that multinational corporations should start undertaking to comply with FATCA.
The Impact of FATCA Withholding on REITS, Real Estate Funds, and Real Estate Investment Entities
Real estate entities have complex international structures with different considerations with respect to FATCA withholding regarding US and non-US entities. This alert focuses on US entities and their obligations under the new FATCA withholding regime.
Accelerating FATCA compliance
This white paper explores PwC's unique approach to FATCA compliance and how its methodology has helped financial services institutions develop strategic and comprehensive assessment and implementation blueprints to achieve compliance.
The expected wave of intergovernmental agreements (IGAs) implementing the tax reporting and withholding procedures commonly associated with the Foreign Account Tax Compliance Act (FATCA) has begun. This is not surprising considering the recent US Department of Treasury announcement that it is engaged with more than 50 countries and jurisdictions around the world to improve international tax compliance and implement FATCA.
Given the ever changing series of events, PwC is here to help you plan and keep up-to-date with the release of these IGAs and identify some of their unique differences by providing you with:
Feel free to click any of the countries below to see the latest development as you consider some of the following actions to think about:
British Virgin Islands
Isle of Man
Actions to think about
As noted above, the IGAs provide that the governments in each respective country will enact legislation or issue guidance on how foreign financial institutions (FFIs) can comply with the information reporting and withholding tax provisions commonly referred to as the FATCA regime. The details needed to implement changes to various processes such as account opening, customer onboarding, customer due diligence, documentation, and tax reporting and withholding will be derived from that guidance. As a result, the signing of these IGAs may be viewed as a first chapter where stakeholders must wait until other guidance or legislation is enacted to have a full picture of what tasks, processes, and system changes may need to be implemented.
Rethink planning and solutions
What impact will the IGAs have on a stakeholder's project planning and solutions design? To the extent possible, the concepts under the IGA framework should be incorporated. If plans were in place based on the proposed FATCA regulations, new strategies should be formed for FFIs in countries covered under an IGA. Plans to manage local law restrictions should also be revised. Operational processes and information technology systems will likely need to change.
Analyze the clauses in all IGAs
Many of the IGAs are expected to contain a 'most favored nation' clause which provides that any more favorable terms negotiated under another country’s IGA may be applied (excluding Annex II provisions). This unique concept is not one used in US income tax treaties and it is not clear how and when it will be invoked. Stakeholders should review the clauses in all IGAs that are released to consider whether a ‘most favored nation’ clause could apply.
Help shape the rules
Financial institutions should closely monitor their country's plan to release local guidance. Is there an opportunity to help shape them by providing input and suggestions to the foreign government?
Quantify potential costs
Companies should also consider broadly quantifying the cost of complying with FATCA and the IGAs, taking into account time and resources. For example, the UK tax authorities requested this information in September 2012 as part of their public consultation on guidance implementing the US/UK IGA. Other jurisdictions may also want to mirror this gathering of data as it may also be used for budgeting purposes.
|Country||Type of IGA||Date signed||Observation|
|British Virgin Islands||Under consideration|
|Canada||Final negotiations underway|
|Cayman Islands||Discussions on-going|
Cayman government announcement
|Czech Republic||Under consideration|
|Denmark||Model IA (Reciprocal)||11/19/2012||
The Denmark IGA is substantially similar to the Model IA Agreement.
|Finland||Final negotiations underway|
|France||Final negotiations underway|
|Germany||Final negotiations underway|
|Guernsey||Final negotiations underway|
|Ireland||Model IA (Reciprocal)||1/23/2013||
On December 21, 2012, the Chargé d’affaires at the US Embassy in Ireland and the Minister for Finance of Ireland signed an intergovernmental agreement (the US-Ireland IGA), for which enabling provisions are due to be enacted into Irish tax legislation in the coming months. The IGA changes the way in which FATCA affects Irish financial institutions. Its effect is to give Irish laws and regulations precedence in governing FATCA compliance for Irish entities and it provides that reporting will be carried out to the Irish Revenue Commissioners, rather than to the IRS. The reporting requirements will apply to all Irish financial institutions, as defined, regardless of whether the entity has US account holders or US assets.
|Isle of Man||Final negotiations underway|
|Italy||Initial discussions underway|
|Japan||Final negotiations underway|
|Jersey||Final negotiations underway|
Luxembourg government announcement
|Mexico||Model IA (Reciprocal)||11/19/2012||
The US-Mexico IGA closely follows the Model IA Agreement issued in July 2012 by the US Department of Treasury and includes a reciprocal approach to the sharing of information between the two governments.
|Netherlands||Final negotiations underway|
|New Zealand||Discussions on-going|
New Zealand government announcement
|Norway||Model IA (Reciprocal)||4/15/2013||Agreement signed|
|Romania||Initial discussions underway|
Singapore government announcement
|Sint Maarten||Under consideration|
|Slovak Republic||Discussions on-going|
|South Africa||Under consideration|
|Spain||Model IA (Reciprocal)||5/14/2013||Agreement signed|
Switzerland and the United States on February 14 signed an intergovernmental agreement (Swiss/US IGA) concerning the implementation of the Foreign Account Tax Compliance Act (FATCA) in Switzerland. This is the first IGA to be signed using the Model 2 version first published as draft by the IRS in November last year. The aim of the IGA is to help facilitate FATCA implementation and reduce burdens for Swiss financial institutions.Switzerland and the United States sign a FATCA Intergovernmental Agreement
|United Kingdom||Model IA (Reciprocal)||9/12/2012||
The US-UK IGA closely follows the Model IA Agreement issued in July 2012 by the US Department of Treasury and includes a reciprocal approach to the sharing of information between the two governments.
Following the release of the US-UK IGA, HM's Revenue and Customs subsequently released Implementing the US-UK FATCA Agreement Consultation Document, which addresses implementation of the US-UK IGA. The Consultation Document sets forth how the UK government intends to legislate and promulgate new rules consistent with the commitment by both governments to significantly increase the scope of information automatically exchanged. The Consultation Document also seeks views and comments from industry and other stakeholders, and it requests information on the expected costs of complying with the US-UK IGA to inform an impact assessment.