The FATCA timeframes have been moved back six months.
On July 12, 2013, the IRS released Notice 2013-43
, revising the timelines for FATCA implementation, including updated dates for initial FATCA withholding, the initiation of new on-boarding procedures, and deadlines for pre-existing account remediation.
The Notice also states that the Internal Revenue Service (“IRS”) will amend the Treasury Regulations issued in January 2013 to reflect the amended timeline and provides needed guidance for Foreign Financial Institutions that operate in jurisdictions where the local government has executed an Intergovernmental Agreement (“IGA”) with the US Department of Treasury (“Treasury”), but where the IGA is not yet in force.
The delay is welcome news and will not only provide New Zealand financial institutions with additional time to assess the impact of FATCA and design and implement the required system and procedural changes but will also provide the New Zealand government with more time to conclude an IGA and complete the procedures to incorporate the IGA into New Zealand law. Revised Timeline for Foreign Financial Institutions (“FFIs”) under an IGA
FFI Portal & GIINs
: The opening of the IRS’ FFI registration portal is delayed from July 15, 2013 and is now projected to be August 19, 2013. The IRS will publish the first FFI list by June 02, 2014 (to ensure inclusion on this list, FFIs should register by April 25, 2014).
New Account Opening Procedures: Notice 2013-43 states that FFIs are required to apply their new account opening procedures no earlier than 1 July 2014 which is a delay of 6 months from the previous application date.
IGA List: Treasury will publish on its website a list of jurisdictions that will be treated as having an IGA in effect (even though an IGA may not be in force by July 1, 2014).
Pre-existing Obligations: Notice 2013-43 states that it is the intent of Treasury to modify the definition of pre-existing obligation. Accordingly, it should be expected that pre-existing obligations, for FFIs in IGAs, will mean accounts, instruments, or contracts outstanding on June 30, 2014.
Pre-existing Obligation Remediation: A six month delay for pre-existing obligation remediation is also expected to be updated by Treasury.
Reporting: Notice 2013-43 indicated that future IGAs will contain provisions requiring that only U.S. accounts identified by 31 December 2014 will be required to be reported in 2015 (rather than the current requirement to report accounts identified in 2013 and 2014).
Inland Revenue FATCA pages go live
This week has also seen the release of Inland Revenue’s FATCA information pages on its website and issue of guidance on what is a financial institution. Further guidance will be released by Inland Revenue in stages as Inland Revenue forms its view on the requirements.
US Treasury updates model IGA
The Treasury Department has revised and reposted the FATCA model IGAs and related annex documents to reflect revised FATCA compliance and registration timelines. See the updated model agreements.