The Foreign Account Tax Compliance Act (“FATCA”) was introduced in the US to improve tax compliance and reduce overseas tax evasion by US persons. It is part of the Hiring Incentives to Restore Employment (Hire) Act, which was enacted on 18 March 2010.
It requires Foreign Financial Institutions (“FFIs”) to report information on accounts held by US persons and certain US controlled foreign entities. FFIs as defined can include Banks, Investment Funds, Custodians and Insurance Companies among others. Failure to comply will result in a 30% withholding tax penalty on all US source withholdable payments (as defined).
It is critical for Irish tax resident entities and branches to first determine whether they fall within one of the four FFI classifications under Ireland’s IGA, and correspondingly if they have registration and reporting obligations.
Key Decision Steps for Irish Entities
- Determine if the entity is an FFI under Ireland’s IGA
- Determine if the entity qualifies for any Annex II Exemptions
- Undertake the necessary due diligence procedures to identify US Reportable Accounts
- Prepare applicable information to report to the Irish Revenue Commissioners
- Register for a Global Intermediary Identification Number (“GIIN”) via the IRS portal
- Consider applicability of other country’s IGAs or US FATCA Regulations to subsidiaries or branches of the entity that are located outside of Ireland
- Consider the organisational impact on the entity’s business as a whole, including its interactions with other service providers affected by FATCA
How We Can Help
Our FATCA team can help walk through the implications of the above steps, and assist you in moving towards becoming Irish IGA compliant.
If you would like to request a FATCA brochure, require information on how we can assist your company, or would like us to call you directly to discuss your particular circumstances, please e-mail us via email@example.com.
We will endeavour to respond to your initial query within two working days.