The FATCA Final Regulations: A Detailed Review of the Requirements
On January 17, 2013, the U.S. Department of Treasury (Treasury) and the Internal Revenue Service (IRS) released the final regulations for the Foreign Account Tax Compliance Act (FATCA). Since the enactment of FATCA in March 2010, Treasury and the IRS have issued several rounds of preliminary guidance, including proposed regulations. The recently released final regulations have been much anticipated by taxpayers that expect to be affected by the new FATCA withholding and reporting regime, particularly in light of the looming January 1, 2014, effective date (December 31, 2013, for Participating Foreign Financial Institutions).
In finalizing the FATCA rules, Treasury and the IRS made efforts to minimize burdens, where possible, and address the issue of local law conflicts. KPMG has reviewed the final regulations and has prepared a detailed analysis covering the following:
- Withholding requirements on withholdable payments to certain FFIs
- Payee Identification
- FFI Agreement
- Section 1471 definitions
- Exempt Beneficial Owners
- Withholding on NFFEs
- Section 1473 Definitions
- Liability for withheld tax and withholding agent reporting
- Registration process
On January 22, 2013, KPMG issued an initial release providing a high level analysis of key changes in the final rules (see FATCA Alert #2013-01 for that high- level analysis).
KPMG’s more comprehensive analysis of the changes, by section, incorporating salient points from the initial release can be accessed by clicking this link: Analysis-of-Final-Fatca-Regulations.pdf (600 KB)
For further information, please do not hesitate to contact us.
Any tax advice in this communication is not intended or written by KPMG to be used, and cannot be used, by a client or any other person or entity for the purpose of (i) avoiding penalties that may be imposed on any taxpayer or (ii) promoting, marketing, or recommending to another party any matters addressed herein.
The information contained herein 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 on such information without appropriate professional advice after a thorough examination of the particular situation.