Australia

Details

  • Service: Tax, Topics, Financial Services Regulation, FATCA
  • Industry: Financial Services, Banking, Investment Management, Insurance, Superannuation, Private Equity, Real Estate & Construction
  • Type: Regulatory update
  • Date: 30/07/2011

FATCA Update

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

FATCA: Where are we now? Issue 3 - July 2011 

An update on implementation of the Foreign Account Tax Compliance Act (FATCA) as at July 2011. On 25 July, the IRS released revised Notice 2011-53 which provides a timeline for the implementation of information reporting and withholding provisions under FATCA.
FATCA: Where are we now? cover
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The notice also discusses other matters that will be addressed in regulations to be issued by Treasury and the IRS.

 

Key insights

  • A new mechanism called ’Passthru Payments’ was introduced that may result in previously classified non-US source income being exposed to the withholding regime.
  • The due diligence requirements to classify existing clients will be onerous; especially where paper based information needs to be considered (as will be the case for private banking clients).
  • FATCA compliance will require significant systems enhancements, changes to the controls and procedures utilised when opening new accounts, and the reworking of many operational processes.
  • This will require a devoted, multi-functional, project team.
 

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