FATCA Registration — Canadian FIs Should Stand Pat
August 28, 2013
Canadian banks and certain other non-U.S. entities have to comply with new withholding rules and information gathering requirements that take effect June 30, 2014 under the U.S. Foreign Account Tax Compliance Act (FATCA). These rules include registering as participating foreign financial institutions, among other things. Although the IRS has just opened a FATCA registration website, Canadian financial institutions (Canadian FIs) may want to wait to do their FATCA registration until an expected Canada-U.S. intergovernmental agreement (IGA) is released.
IRS FATCA web portal now open
The IRS portal, which was opened on August 19, 2013, allows for registration through December 31, 2013 and provides an opportunity for users to become familiar with the FATCA registration website, input preliminary information, and refine that information.
The IRS issued a 75-page “user guide” to assist applicants with the FATCA registration process on August 28, 2013. This publication includes detailed information about how to create a new account and edit information.
According to the IRS, any information entered into the online system before January 1, 2014, even if submitted as final, will merely be stored until the information is submitted as final on or after January 1, 2014. On or after that date, each applicant will be expected to finalize its registration information by logging into its online account on the FATCA registration website, making any necessary additional changes, and submitting the information as final.
As registrations are finalized and approved in 2014, the IRS will send applicants a notice of registration acceptance and issue a global intermediary identification number (GIIN). The IRS will electronically post the first IRS foreign financial institution (FFI) list by June 2, 2014, and will update the list on a monthly basis thereafter. To be included in the June 2014 IRS FFI list, an applicant will need to finalize its registration by April 25, 2014.
Canadian FIs should wait and see
Canadian FIs that are considered to be FFIs should have additional time to finalize registration beyond the April 25, 2014 deadline once the Canada-U.S. IGA comes into effect. Therefore, affected Canadian FIs may want to wait until the Canada-U.S. IGA is released and further guidance is provided before registering their FATCA status.
Corporate groups with non-Canadian FIs
Canadian multinationals that have non-Canadian FFIs in their corporate groups that are not in countries that have IGAs with the U.S. may want to make sure those FFIs are registered for FATCA by April 25, 2014 so they are included on the IRS FFI list as of June 2014. These FFIs can now log on to the IRS's online FATCA registration portal and begin to register.
We can help
KPMG Canada’s experienced, multidisciplinary team of tax and advisory professionals can help your multinational Canadian company meet its FATCA requirements. We provide FATCA advice to a wide range of financial services and general business organizations and can assist you in determining the FATCA categories for entities in your organization. To discuss any aspect of FATCA, please contact your KPMG adviser.
Information is current to August 28, 2013. The information contained in this TaxNewsFlash-Canada is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG’s National Tax Centre at 416.777.8500.
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