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Details

  • Service: Tax, Financial Services
  • Industry: Financial Services
  • Type: Newsletters
  • Date: 7/2/2014

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 2014-21 / Qualified Intermediary News Issue 2014-05 

July 2014

Updated Qualified Intermediary (QI) Agreement released and posted to the FATCA website

 

An updated Qualified Intermediary (QI) Agreement has been released and posted to the FATCA Website. Revenue Procedure 2014-39 updates and supersedes the QI Agreement originally released as Revenue Procedure 2000-12, 2000-1 C.B. 387.

 

The link to Revenue Procedure 2014-39 (PDF, 385 KB), setting out the updated QI Agreement, has been added to the FATCA Registration and FATCA Governments Website sections of the FATCA Website.

 


 

Final version of Form 1042-S instructions for withholding, reporting foreign person’s U.S. income paid in 2014

 

The IRS has posted the final version of instructions for Form 1042-S,Foreign Person’s U.S. Source Income Subject to Withholding, relating to reporting by financial institutions and withholding agents for amounts in 2014 subject to withholding under Chapter 3 and for reporting certain payments subject to Chapter 4 (FATCA).

 

Read the Form 1042-S instructions (PDF, 395 KB) for 2014.

 

The final version of Form 1042-S (2014) (PDF, 185 KB) was released earlier this year.

 


 

IRS addendum to “online registration user guide” publication

 

The IRS has posted an addendum to a FATCA publication - Pub. 5118-A, Foreign Account Tax Compliance Act Online Registration User Guide Addendum.

 

The addendum issued as Pub. 5118-A (PDF, 521 KB) supplements the FATCA online user guide originally issued as Pub. 5118 (PDF, 9.05 MB).

 

The addendum to the FATCA Online Registration User Guide describes a “new functionality” - i.e., an update to the naming conventions of country-lookup table.

 


 

Corrections to regulations on information reporting, withholding

 

On 30 June, the Treasury Department and IRS released for publication in the Federal Register two sets of corrections to final and temporary regulations (T.D. 9657 and T.D. 9658) that were released in late February 2014 and published in the Federal Register in March 2014. These regulations were issued with an intention to harmonize the information reporting and withholding rules under Chapters 3 and 61 of the Code to the regulations under the Foreign Account Tax Compliance Act (FATCA) regime.

 

Read the 26-page text of the corrections [external link] to T.D. 9657


Read the 36-page 
text of the corrections [external link] to T.D. 9658

 

Overview

 

The corrections relate to two sets of regulations - one concerning information reporting by foreign financial institutions (FFIs) with respect to U.S. accounts and withholding on certain payments to FFIs and other foreign entities, and the other concerning withholding of tax on certain U.S. source income paid to foreign persons, information reporting, and backup withholding with respect to payments made to certain U.S. persons, and portfolio interest paid to nonresident alien individuals and foreign corporations.

 

The preambles to these corrections document state that the original final and temporary regulations contain a “number of items that need to be corrected or clarified.”

 

In addition to corrections of citations and cross-references, the temporary regulations are modified to clarify the relevant provisions to meet their intended purposes, as well as adding language that was inadvertently removed in the final and temporary regulations.

 

The corrections are effective on 1 July 2014 - the date when they will be published in the Federal Register.

 


 

Model 1 IGAs reached “in substance” with China, Guyana, and Ukraine

 

The U.S. Treasury Department updated its FATCA webpage to report that China, Guyana and Ukraine have reached an “agreement in substance” for a Model 1 intergovernmental agreement (IGA) with the United States. China consenting to this status as of 26 June 2014, Guyana consenting to this status as of 24 June 2014, and Ukraine consenting to this status as of 26 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.

 

For further information, please do not hesitate to contact us.

 

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