• Service: Topics, Financial Services Regulation, FATCA
  • Industry: Financial Services, Banking, Investment Management, Insurance, Superannuation, Real Estate & Construction
  • Type: Regulatory update
  • Date: 11/10/2011

FATCA and real estate/infrastructure funds 

As the IRS has not yet issued final guidance under Foreign Account Tax Compliance Act (FATCA), the rules remain fluid in many important respects. Based on preliminary IRS guidance to date, to avoid withholding on income imposed from 1 January 2014, a non-US fund has until 30 June 2013 to enter into an agreement with the IRS to comply with FATCA.
FATCA and real estate/infrastructure funds cover
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All existing real estate and infrastructure funds with exposure to US assets (directly, indirectly or through affiliated entities) should consider how FATCA will impact their business.


Key insights

  • To date, FATCA is something few Australian real estate funds and investors have had to consider.
  • FATCA is a new US withholding regime that will impose a punitive 30 percent withholding from certain US source income, including income from Real Estate.
  • Whilst FATCA is a US anti-avoidance measure designed to catch US investors not disclosing US source income they have earned via offshore funds and entities, its impact is so far-reaching that it may affect non-US investors also.
  • There are a number of potential issues that FATCA may uncover and which may require consideration before FATCA goes "live".

FATCA Update

FATCA: Where are we now?
This series provides an update on the status of the Foreign Account Tax Compliance Act (FATCA).

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