FATCA & its impact on your business 

The Foreign Account Tax Compliance Act (“FATCA”) requires Foreign Financial Institutions (“FFIs”) to register and report information on accounts held by US persons and certain US controlled foreign entities.  Failure to comply will result in a 30% withholding tax penalty on certain US sources of income beginning 1 July 2014.

It is critical for Irish tax resident entities and Irish branches of foreign entities to determine whether or not they are classified as Reporting Irish Financial Institutions under Ireland’s IGA with potential registration and reporting obligations.

 

Recent Updates

 

26 March 2015: In light of recent developments in other Model I IGA jurisdictions, in particular the abolition of the nil return reporting requirement in the UK, the Irish Revenue Commissioners have issued updated guidance to advisers and industry groups on the following Irish FATCA related matters:

 

  • To confirm the continued requirement for Irish Financial Institutions to file nil returns with the Irish Revenue Commissioners via ROS by 30 June annually in accordance with Regulation 9 of S.I. No. 292 of 2014
  • In response to a very restrictive answer by the US on a recent FAQ, the Irish Revenue Commissioners have helpfully confirmed with the IRS that an Irish Financial Institution is not required to obtain a FATCA self-certification immediately upon opening a new individual account. However, the Irish Financial Institution’s account opening procedures should not be regarded as fully completed until such a self-certification is obtained. Accordingly, an Irish Financial Institution should be prepared to close an account if an account holder does not provide a self-certification within a reasonable length of time
  • No update was provided in relation to the UK’s decision to revoke the Relevant Holding Company and Relevant Treasury Company categories of FFIs. However, additional guidance on the Irish categories of Relevant Holding Companies and Relevant Treasury Companies will be issued in the coming months along with the next version of the Irish FATCA Guidance Notes.

 

Key decision steps for Irish entities

  • Determine if the entity is classified as an FFI under Ireland’s IGA
  • Determine if the entity qualifies for any registration and/or reporting exemptions
  • Register for a Global Intermediary Identification Number (“GIIN”) via the IRS portal
  • Undertake the necessary due diligence procedures to identify US Reportable Accounts
  • Prepare the applicable information to report to the Irish Revenue Commissioners
  • Consider the applicability of other country’s IGAs or US FATCA Regulations to subsidiaries or branches located outside of Ireland
  • Consider the organisational impact of FATCA on the entity’s business, including its interactions with other service providers, the risk of the 30% FATCA withholding tax on US source income and the inclusion of FATCA language in legal agreements

 

How KPMG 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 a FATCA brochure or require further information on how we can assist your company, please call us or email: rachel.hewitt@kpmg.ie.

FATCA contacts

Kevin Cohen, FATCA partner

Kevin Cohen

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Partner - FATCA 

kevin.cohen@kpmg.ie
+353 1 410 2369

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Rachel Hewitt

Rachel Hewitt
Manager, Tax  

rachel.hewitt@kpmg.ie

+353 1 700 4392

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