IRS grants extension of time to file FATCA reporting for 2014

Extension of Form 8966, FATCA reporting

Under the Foreign Account Tax Compliance Act (FATCA) certain US withholding agents, foreign financial institutions (FFIs), and non-financial foreign entities, are required to file Form 8966, FATCA Report, using the International Data Exchange Service (IDES) provided by the Internal Revenue Service (IRS). The original due date for filing the 2014 Form 8966 was March 31, 2015. For calendar year 2014 reporting only: The IRS provided an automatic 90-day extension of time to file Form 8966 to all filers extending the deadline until June 29, 2015.

Request for additional extension

Filers can now request a second automatic 90-day extension by completing the Request for Additional Extension of Time to File Form 8966 for Tax Year 2014. Filers that request the second extension will have until September 28, 2015 to submit Form 8966. The instructions provided by the IRS notes that each filer must complete a separate template. For example, if you are a sponsoring entity requesting an additional extension of time to file Form 8966 both on behalf of yourself and with respect to reporting on behalf of a sponsored entity, you must submit separate requests.

Request for waiver from filing Form 8966 electronically

An extension of time to file Form 8966 does not relieve filers from the electronic filing requirement. If a filer is unable to file Form 8966 electronically as a result of an undue hardship, a request to file Form 8966 on paper can be made by submitting the template Request for Waiver from Filing Form 8966 Electronically for Tax Year 2014. Both requests can be mailed together.

Where to submit these requests

Both of these requests need to be typed and should be mailed on or before June 29, 2015 to:

Internal Revenue Service
FATCA, Stop 6052 AUSC
3651 South IH 35
Austin, Texas 78741

PwC Observation: Under the terms of the
applicable intergovernmental agreements, reporting Model 2 FFIs are not
entitled to an extension of time for aggregate reporting on non-consenting US
accounts. Entities that are located in a Model 1 jurisdiction (e.g., Singapore)
and reporting on behalf of themselves (or any entities that are reporting on
behalf of another entity that is located in a Model 1 jurisdiction) must follow
the reporting guidance provided by the Model 1 jurisdiction’s tax authority
and may not seek an extension from the IRS.

Should you have any questions, please contact your usual PwC contact or me.

Agreement between Switzerland and EU for automatic exchange of information in tax matters: signing and consultation

The agreement between Switzerland and the EU for Automatic Exchange of Information (AEOI) in tax matters was signed on 27 May 2015 in Brussels. Switzerland and the 28 EU member states intend to collect account data starting in 2017 and exchange it from 2018 once the necessary legal basis has been created. The agreement was signed by Swiss State Secretary Jacques de Watteville, Finance Minister Jānis Reirs from Latvia, representing the EU Presidency, and EU Commissioner Pierre Moscovici. The agreement on the AEOI in tax matters will apply for all 28 EU member states. The OECD’s global AEOI standard has been included in full in the new agreement.

The agreement signed is a protocol of amendment to replace the taxation of savings agreement between Switzerland and the EU that has been in force since 2005, but it includes the existing withholding tax exemption for cross-border payments of dividends, interest and royalties between related entities. Interestingly, the Federal Council’s press release states that given that various EU member states have launched or enhanced tax regularisation programmes recently, “he regularisation of the past with neighbouring countries and the main EU member states can be considered settled to a large extent”.

In addition, the Federal Council has also started the consultation period regarding the EU AEOI agreement. Interested parties and the cantons have until 17 September 2015 to comment on the AEOI agreement with the EU. Thereafter, the Federal Council will submit the agreement to parliament for approval.

Parallel to this, work is continuing on the legal basis for the automatic exchange of information with foreign countries. The Federal Council will adopt the dispatches on the AEOI Act, the Multilateral Competent Authority Agreement and the OECD/Council of Europe administrative assistance convention for the attention of parliament in the weeks ahead.

Finally, the European Commission is currently concluding negotiations for similar agreements with Andorra, Liechtenstein, Monaco and San Marino, which are expected to be signed before the end of 2015.

We will continue to keep you updated on AEOI events as they occur. If you have any questions in the meantime, please feel free to contact me.

Press release Switzerland

Press release EU

Finally, click here to PwC recent Common Reporting Standard Webcast which you can still view online.

Recent IRS comments on FATCA, QI and 871(m) and other FATCA developments

Recent Comments from the IRS on FATCA, QI and 871(m)

The IRS has made several interesting comments while speaking at conferences over the last couple of weeks.

  • FATCA – according to the IRS, we can expect a revised version of the form W-8BEN-E sometime late this year or early next year.
  • FATCA – according to the IRS, the process for registering sponsored entities will kick off late this summer and will include options for adding sponsored entities either individually or via a bulk upload.
  • FATCA – according to the IRS, when a client provides a reasonable explanation for his/her loss of citizenship (given in lieu of a Certificate of Loss of Nationality), such a reasonable explanation should be fact based.
  • Qualified Intermediary (QI) – according to the IRS, there are currently no plans to issue a revised version of the current QI agreement.  Instead, the IRS will begin working on the 2017 version of the agreement and may issue a notice in the meantime to address a few issues that were not fully covered in the current agreement.
  • Dividend Equivalent Payments (871(m)) – the IRS is planning to issue the final regulations on withholding on dividend equivalent payments soon.  These regulations will retain the delta standard but will contain significant changes to reflect the feedback received on the proposed rules.  The regulations will also push back the effective date of the regulations to apply to contracts and payments made after 1 January 2017.

Other IRS FATCA Updates

Updated IDES Information

The IRS has recently updated several of the IDES web pages including the IDES Resources, the IDES Technical FAQs and the FATCA XML Schema Recommendations for DocRefId web pages.

Upcoming IDES Testing Period

The FATCA IDES opens on Monday, June 1 2015 for testing and will be available until 12:00 EST on Monday, June 8 2015.  All users that have completed their IDES enrollment by Thursday, May 28 2015 will be able to access the test session.

Recent Developments in IGA Countries

Belgium

On 20 April 2015, the Federal Public Department of Finance released the Belgian FATCA Guidance Notes in draft format.

Additional information about the implementation of FATCA in Belgium can be found on the Federal Public Department of Finance’s website.

British Virgin Islands

Reporting British Virgin Islands financial institutions that have not already done so need to register with the British Virgin Islands Financial Account Reporting System by 1 June 2015.  Nil reports are not required to be filed but if a financial institution would like to do so, such a financial institution would need to register to be able to do so.  For more information, please see the recent press release.

Cayman Islands

On 20 May 2015, the Cayman Department for International Tax Cooperation issued another update concerning the notification and reporting deadlines for Cayman reporting financial institutions.  Accordingly, notifications may now be submitted on or before Friday, 29 May 2015 and returns may be reported on or before Friday, 26 June 2015, without attracting adverse consequences or enforcement measures.

France

On 27 April 2015, the French tax authorities released a revised version (1.4) of the IT requirements for FATCA reporting.

Germany

The German tax authority (Bundeszentralamt für Steuern) frequently publishes information alerts in the German language for financial institutions and service providers. The information alerts are in the form of non-binding guidance but should be monitored by financial institutions operating in Germany.

In April, the German tax authority released an information alert addressing the publication of a communication handbook. This communication handbook gives detailed guidance on how to register as well as how data should be transmitted to the German tax authority via the “ELMA” procedure. Moreover, the most recent information alert offers the possibility of performing a testing procedure for reporting purposes.

Kuwait

On 29 April 2015, the United States and Kuwait signed a Model 1B Intergovernmental Agreement (IGA) to improve international tax compliance with respect to the Foreign Account Tax Compliance Act and to combat international tax evasion.

Malaysia

On 19 May 2015, the Inland Revenue Board of Malaysia (IRBM) posted an update stating that the date for submission of information in accordance with the draft FATCA guidance notes to IRBM has been postponed from 30 June 2015 as the Malaysia-US IGA is still being finalised.  A new date will be announced in a future posting.

Mauritius

The Mauritius Revenue Authority (“MRA”) has announced that Mauritius-based financial institutions registered with the IRS for FATCA reporting have to report information in respect of the year 2014 to the MRA by 31st July 2015 for onward transmission to the US IRS.

Mexico

The Mexico-US intergovernmental agreement to implement FATCA requires financial institutions which are located or resident in Mexico such as banks, asset managers, insurance businesses or fiduciaries (among others) to report financial information on certain accounts owned directly or indirectly by U.S. persons, to the Mexican Tax Authorities (Servicio de Administración Tributaria or SAT).

The filing deadline for the first of these reports was originally set at 31 May 2015, however, the Mexican tax authorities have this week announced on their website a revised deadline of 15 September 2015. This will shortly be published in the Official Gazette.

The first FATCA reports must now be submitted by 15 September 2015 and will include information such as:
· Name, address and tax reference number of the client
· Average monthly account balance or value and account number

Both entities and individuals will need to be reported. So, if the financial institution has any clients who are a) US individuals; b) US entities; or c) non-US entities controlled by US individuals or US entities (“US clients”), such financial institutions will need to be ready to report by 15 September 2015.

Netherlands

The deadline for reporting to the Dutch authorities is 1 June 2015.  By then, financial institutions in the Netherlands need to provide a specific set of data to the Dutch tax authorities (DTA) based on the FATCA IGA concluded between the Netherlands and the US.  For more information about how PwC Netherlands can assist you with this reporting, please see the attached flyer.

Poland

On 4 May 2015, President Bronislaw Komorowski signed a bill ratifying the agreement with the United States concerning enforcement of the Foreign Account Tax Compliance Act (FATCA), which provides a basis for the exchange of information about income and accounts of tax residents between the United States and Poland. The implementation process has not been finalised as the bill implementing the IGA (which is different from the bill on ratification) is still in the legislative process.

United Kingdom

On 15 April 2015, the UK’s International Tax Compliance Regulations 2015 came into effect.  These supersede the previous FATCA regulations that came into force on 20 June 2014.  For more information regarding the changes, please see our recent PwC UK News Release.

The UK has also published an updated FATCA Schema, updated guidance regarding registration and reporting, and guidance around the recent changes for the classification of holding companies and treasury companies.

 

If you have any questions to the recent comments, please feel free to contact me.

FATCA Updates – April 2015

IRS IDES Updates

The IRS has recently updated a number of the websites and resources for the FATCA IDES including the IDES User Guide, which includes new enhancements for reporting and other instructions, and the FAQs to update certain responses and add others.

The IRS has also published examples to explain how to create an IDES data packet and decrypt a notification. The three examples on data preparation for Java, .NET, and OpenSSL can be found on GitHub.

IGA Updates

Cayman Islands

The Cayman Islands Department for International Tax Cooperation (DITC), on April 16, 2015, released Version 1.2a of the Cayman Island Automatic Exchange of Information Portal User Guide.  The User Guide provides clarification on the notification process by sponsoring Cayman financial institutions (Sponsoring FIs) with respect to sponsored Cayman FIs (Sponsored FIs) and filing a nil return (FATCA Reports). The three critical clarifications in the updated User Guide are: (1) Sponsored FIs do not have to provide a notification on the AEOI Portal; (2) the Sponsoring FI must provide notification (regardless of whether reporting is required) with its own global intermediary identification number (GIIN); and (3) filing a nil return is not mandatory.

For more information, please see our recently published PwC Tax Insight.

Luxembourg

On 30 March 2015, the Luxembourg parliament published the draft law (in French) and released it for discussion on the 27 March 2015 by the minister of finance. This long-awaited draft law aims at adopting the IGA signed one year before on 28 March 2014 and under the terms of which FATCA will be applied in Luxembourg. In addition to the IGA itself, some new obligations and sanctions are developed in the law, with the obligation to inform the reported client prior to reporting likely being the most important.

For more information, please see our recently published PwC Flash News.

Malta

The filing deadline for Reporting Malta Financial Institutions has been extended to 15 June 2015.  Reporting Malta Financial Institutions will not suffer any applicable penalties provided that the information that is required to be reported for FATCA purposes is submitted to the commissioner not later than 15 June, 2015.

The commissioner further informs that this exception will apply for 2015 only.

More information can be found on the Inland Revenue Authority of Malta’s Website.

 

Seychelles

The Seychelles Revenue Commission has issued a circular on information that financial institutions are required to report under the U.S. Foreign Account Tax Compliance Act agreement.

Singapore

The filing deadline for Reporting SGFIs to submit their first FATCA reporting data has been extended to 31 July 2015 (from 31 May 2015). This extension was provided to allow sufficient time for FIs to obtain public certificates for enrolling into the IDES, to prepare the reporting packet in accordance with the IRS’s requirements, and to conduct IDES testing, if desired, prior to the submission of account data.

More information can be found on the Inland Revenue Authority of Singapore’s Website

Spain

As published in the Spanish Official Bulletin on 12 March, an Order (in Spanish) was included to extend the deadline for FATCA reporting under the IGA until 31 May 2015.

Uzbekistan

On 3 April 2015, U.S. Ambassador to Uzbekistan Pamela Spratlen and Chairman of the State Tax Committee of Uzbekistan, Botir Parpiyev, signed the Intergovernmental Agreement (IGA) to improve International Tax Compliance with respect to the Foreign Account Tax Compliance Act.