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Clock Ticking Down – Only Days Left To FATCA Registration

IGA List Expands To 55 (And Mexico IGA Revised)

60 days remain until the July 1st deadline that FATCA’s 30% withholding applies to payments from US sources.

But of immediate importance is the 4 days remaining for foreign financial institutions (FFIs) to register by May 5 with the IRS to obtain a GIIN and to be included on the IRS’ list of participating FFIs in order to avoid the attracting the 30% withholding by US withholding agents.  Yet, as of April 30th, the list of IGAs now to be treated in effect is only, including 28 that have been signed and 27 that have only been agreed in substance.  Firms in the other 100 jurisdictions, many who expected last minute relief, are now in a panic.

FFIs in IGA jurisdictions have an extension to register with the IRS – until December 22, 2014 to obtain their GIINs.  Financial Institutions that are treated as Reporting Financial Institutions under a Model 1 IGA register as Registered Deemed-Compliant Foreign Financial Institutions, whereas Financial Institutions that are treated as Reporting Financial Institutions under a Model 2 IGA register as Participating Foreign Financial Institutions.

6 IGAs have been added this past week, including Belgium, Bulgaria, Colombia, Cyprus, Estonia, and Sweden (albeit Estonia was signed over 2 weeks past but had not yet been included).  The Mexico-USA IGA of November 19, 2012 has meanwhile this past week been revised and re-issued.

Conspicuously, the most important US FDI jurisdictions that are not yet included on the list are China, Hong Kong and Taiwan, as well as the Middle Eastern jurisdictions such as Israel, United Arab Emirates, and Saudi Arabia.  Recent US tension with Russia over the Ukraine and Crimea brought its treasury negotiations to a standstill.

One month ago now the IRS released the new 2014 Form W-8BEN-E that must be used by entities that are beneficial owners of a U.S. source payment, or of another entity that is the beneficial owner.  Form W-8BEN-E has thirty parts.  All filers will complete Parts I and XXIX.

Part I of the form requires general information, the QI status, and the FATCA classification of the filer.  Question 4 of Part I requests the QI status. If the filer is a disregarded entity, partnership, simple trust, or grantor trust, then the filer must complete Part III if the entity is claiming benefits under a U.S. tax treaty. Question 5 requests the FATCA classification of the filer. The classification indicated determines which one of the Parts IV through XXVIII must be completed.

Part XXIX requires certification, under penalty of perjury, by the payee or a person authorized to sign on the payee’s behalf.  This part of the final form also contains the following language that does not appear in the current form: “I agree that I will submit a new form within 30 days if any certification made on this form becomes incorrect.”

Note that if the filer is a passive NFFE, it must complete Part XXVI as well as Part XXX if it has substantial U.S. owners.  For a Passive NFFE, a specified U.S. person is a substantial U.S. owner if the person has more than a 10 percent beneficial interest in the entity.  Completion of the other parts of the final form W-8BEN-E will depend upon the FATCA classification of the filer.  For further analysis of that form, keep abreast of my updates on Tax Connections!

The following jurisdictions are treated as having a FATCA intergovernmental agreement (IGA) in effect.

jurisdictions that have reached agreements in substance (beginning on the date indicated in parenthesis):

Model 1 IGA = 26

  1. Australia (4-2-2014)
  2. Bahamas (4-17-2014)
  3. Brazil (4-2-2014)
  4. British Virgin Islands (4-2-2014)
  5. Bulgaria (4-23-2014)  <— new
  6. Colombia (4-23-2014)   <— new
  7. Croatia (4-2-2014)
  8. Czech Republic (4-2-2014)
  9. Cyprus (4-22-2014)   <— new
  10. Gibraltar (4-2-2014)
  11. India (4-11-2014)
  12. Jamaica (4-2-2014)
  13. Kosovo (4-2-2014)
  14. Latvia (4-2-2014)
  15. Liechtenstein (4-2-2014)
  16. Lithuania (4-2-2014)
  17. New Zealand (4-2-2014)
  18. Poland (4-2-2014)
  19. Portugal (4-2-2014)
  20. Qatar (4-2-2014)
  21. Slovak Republic (4-11-2014)
  22. Slovenia (4-2-2014)
  23. South Africa (4-2-2014)
  24. South Korea (4-2-2014)
  25. Sweden (4-24-2014)   <— new
  26. Romania (4-2-2014)

Model 2 IGA = 1

  1. Austria (4-2-2014)

jurisdiction that have signed and entered into a formal IGA

Model 1 IGA = 24

  1. Belgium (4-23-2014) <— new
  2. Canada (2-5-2014)
  3. Cayman Islands (11-29-2013)
  4. Costa Rica (11-26-2013)
  5. Denmark (11-19-2012)
  6. Estonia (4-11-2014) <— new
  7. Finland (3-5-2014)
  8. France (11-14-2013)
  9. Germany (5-31-2013)
  10. Guernsey (12-13-2013)
  11. Hungary (2-4-2014)
  12. Honduras (3-31-2014)
  13. Ireland (1-23-2013)
  14. Isle of Man (12-13-2013)
  15. Italy (1-10-2014)
  16. Jersey (12-13-2013)
  17. Luxembourg (3-28-2014)
  18. Malta (12-16-2013)
  19. Mauritius (12-27-2013)
  20. Mexico (4-17-2014) <— newly revised
  21. Netherlands (12-18-2013)
  22. Norway (4-15-2013)
  23. Spain (5-14-2013)
  24. United Kingdom (9-12-2012)

Model 2 IGA = 4

  1. Bermuda (12-19-2013)
  2. Chile (3-5-2014)
  3. Japan (6-11-2013)
  4. Switzerland (2-14-2013)

The LexisNexis® Guide to FATCA Compliance comprises 34 Chapters grouped in three parts: compliance program (Chapters 1–4), analysis of FATCA regulations (Chapters 5–16) and analysis of Intergovernmental Agreements (IGAs) and local law compliance requirements (Chapters 17–34), including  information exchange protocols and systems.  The 34 chapters include many practical examples to assist a compliance officer contextualize the regulations, IGA provisions, and national rules enacted pursuant to an IGA.  Chapters include by example an in-depth analysis of the categorization of trusts pursuant to the Regulations and IGAs, operational specificity of the mechanisms of information capture, management and exchange by firms and between countries, and insights as to the application of FATCA and the IGAs for BRIC and European country chapters.



William H. Byrnes has achieved authoritative prominence with more than 20 books, treatise chapters and book supplements, 1,000 media articles, and the monthly subscriber Tax Facts Intelligence. Titles include: Lexis® Guide to FATCA Compliance, Foreign Tax and Trade Briefs, Practical Guide to U.S. Transfer Pricing, and Money Laundering, Asset Forfeiture; Recovery, and Compliance (a Global Guide). He is a principal author of the Tax Facts series. He was a Senior Manager, then Associate Director of international tax for Coopers and Lybrand, and practiced in Southern Africa, Western Europe, South East Asia, the Indian sub-continent, and the Caribbean. He has been commissioned by a number of governments on tax policy. Obtained the title of tenured law professor in 2005 at St. Thomas in Miami, and in 2008 the level of Associate Dean at Thomas Jefferson. William Byrnes pioneered online legal education in 1995, thereafter creating the first online LL.M. offered by an ABA accredited law school (International Taxation and Financial Services graduate program).