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Details

  • Service: Tax, Financial Services
  • Industry: Financial Services
  • Type: Newsletters
  • Date: 6/25/2014

Contact

Gérard Laures
Partner, Tax
Tel. +352 22 51 51 5549

gerard.laures@kpmg.lu

 

Frank Stoltz
Partner, Tax
Tel. +352 22 51 51 5520
frank.stoltz@kpmg.lu

FATCA e-alert Issue 2014-18 

June 2014

Final version of instructions for Form W-8IMY

 

The IRS has posted the final version of the instructions for Form W-8IMY, Certificate of Foreign Intermediary, Foreign Flow-Through Entity, or Certain U.S. Branches for United States Tax Withholding (Rev. June 2014).

 

The 16-page Form W-8IMY instructions (PDF, 231 KB) explain that Form W-8IMY - along with Forms W-8BEN, W-8BEN-E, W-8ECI, and W-8EXP - all reflect the withholding and documentation requirements of Chapter 4 (also referred to as FATCA for the Foreign Account Tax Compliance Act).

 

  • Under Chapter 4, foreign financial institutions (FFIs) that are participating FFIs - and certain registered deemed-compliant FFIs - are generally required to identify their U.S. account holders, regardless of whether a payment subject to withholding under Chapter 3 or Chapter 4 is made to the account.
  • U.S. withholding agents and FFIs will be required to begin withholding under FATCA (Chapter 4) on certain payments beginning on 1 July 2014.
  • Form W-8IMY is to be used by an intermediary or flow-through entity to certify as to its status under both Chapters 3 and 4 and to address special provisions for intermediaries and flow-through entities that are FFIs for FATCA purposes.
  • In general, intermediaries and flow-through entities receiving reportable amounts will be required to provide both their Chapter 3 status and the Chapter 3 status of persons for whom they receive such payments.
  • An intermediary or flow-through entity receiving a withholdable payment will be required to provide its Chapter 4 status and the Chapter 4 status of persons for whom it receives a withholdable payment when required for Chapter 4 purposes. Failure to provide this information may subject the intermediary or flow-through entity to withholding at a 30% rate.

 

The IRS previously released the final version of Form Form W-8IMY (PDF, 258 KB). The form includes sections for entities to complete—including a section for branches of FFIs and disregarded entities—and reflects changes under Chapter 4

 


 

New Zealand - FATCA intergovernmental agreement signed with United States

 

Representatives of the governments of New Zealand and the United States today signed an Intergovernmental Agreement (IGA) to implement the Foreign Account Tax Compliance Act (FATCA).

 

Model I reciprocal IGA

 

As expected the IGA is based on the Model I IGA and will require New Zealand financial institutions to identify customers and investors that are U.S. persons, or controlled by U.S. persons, and to report certain financial information to Inland Revenue. Inland Revenue will then exchange the information with the IRS.

 

The IGA is reciprocal in nature so in return Inland Revenue will receive information about New Zealanders with investments in U.S. financial institutions.

 

Read a June 2014 report (PDF, 155 KB) prepared by the KPMG member firm in New Zealand: New Zealand signs FATCA IGA with the United States.

 


 

IGAs “agreement in substance” with Belarus, Caribbean Islands, Georgia, Paraguay; text of IGA with South Africa

 

On 13 June, the U.S. Treasury Department updated its FATCA webpage to report that the following countries reached an “agreement in substance” for a Model 1 intergovernmental agreement (IGA) with the United States, and consented to this status as of the date shown:

 

  • Antiqua and Barbuda (3 June 2014)
  • Belarus (6 June 2014)
  • Georgia (12 June 2014)
  • St. Kitts and Nevis (4 June 2014)
  • St. Lucia (12 June 2014)
  • St. Vincent and the Grenadines (2 June 2014)

 

Treasury reports Paraguay agreed “in substance” to a Model 2 IGA, as of 6 June 2014

 

In early April 2014, the IRS and Treasury Department announced that foreign financial institutions (FFIs) located in a jurisdiction that has reached an “agreement in substance” with the United States, under the FATCA regime, will be treated as having an agreement in effect until the end of 2014.

 

Furthermore, the KPMG member firm in South Africa reported the Model 1 IGA to implement FATCA rules. The U.S. Treasury Department has also posted text of this IGA.

 

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.

 

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