Most foreign financial institutions (FFIs) will need to register as a reporting institution on the IRS FATCA portal. After registration, the FFI will obtain a Global Intermediary Identification Number (GIIN) which can be used to identify itself to relevant counterparties.
The key dates for registration are as follows:
- The IRS FATCA Registration Portal went live on 1 January 2014. FFIs can now register as Reporting Institutions for FATCA purposes
- FFIs (including UK branches of overseas FFIs) must register on the FATCA Portal no later than 5 May 2014. This means they can appear on the starting list of registered FFIs. The list will be published by 2 June 2014.
The UK has also recently launched its own FATCA-style initiative. From 1 July 2014, UK Financial Institutions (FI) will have to:
- review their accounts
- provide information about accounts held by Crown Dependency tax residents and Gibraltar (under the reciprocal agreements in much the same way as they will under the FATCA rules)
In addition, the Organisation for Economic Co-operation and Development (OECD) has recently published proposals for international information exchange between OECD tax authorities. This is part of the OECD’s Base Erosion and Profit Shifting initiative which is designed to update international tax rules and minimise multinationals’ perceived tax avoidance. This could mean FATCA-style reporting would be rolled out to all major tax jurisdictions requiring full reporting on all accounts managed by financial institutions.
With these developments, it seems clear that all UK financial institutions need to establish procedures and systems to monitor and report on their financial accounts.
We recommend the following next steps:
1. If you have not already done so, you should confirm the FATCA status of each of your entities to determine whether full reporting will be mandatory or not
2. Based on the stage one outcome, you should identify the actions your business must take to comply with the UK-US Intergovernmental Agreement (IGA) requirements by 1 July 2014
3. If appropriate, register your business on the FATCA Portal before the 5 May 2014 deadline
There is still time to act but the deadline is approaching.