The IRS has confirmed that the period for implementation of the Foreign Account Tax Compliance Act has been extended by a period of 6 months.
On 12 July 2013, the United States Internal Revenue Service (the "IRS") issued Notice 2013-43 (the "Notice") to confirm that the period for implementation of the Foreign Account Tax Compliance Act ("FATCA") has been extended by a period of 6 months.
Accordingly, the withholding of 30% of certain payments to foreign financial institutions ("FFIs") (within the meaning of FATCA) has been delayed until 1 July 2014 (originally this would have commenced on 1 January 2014). This will also serve as the new date by which new account opening procedures must be in place as well as the date by which accounts will be deemed to be pre-existing accounts for the purposes of the FATCA due diligence being carried out by withholding agents and FFIs.
Reports concerning US accounts required to be filed with the IRS by 31 March 2015 were originally meant to cover both the 2013 and 2014 calendar years. However, the Notice now confirms that the reports will now only be required to cover the 2014 calendar year.
15 July 2013 was earmarked as the date on which the IRS registration portal (the "Portal") was to become live. However, the Portal will now go live on 19 August 2013. FFIs are required to register via the Portal by 25 April 2014. Registration will ensure that the FFIs are included in the first list of FATCA compliant FFIs due to be published by the IRS by 2 June 2014.
The extension of the requisite timelines was granted in order to give countries additional time to enter into intergovernmental agreements for the purposes of FATCA. As highlighted in our ezine for February/March 2013, negotiations between Ireland and the United States were successful in ensuring the establishment of an Irish intergovernmental agreement (the "Irish IGA") to facilitate the implementation of FATCA. The Irish IGA was signed on 21 December 2012 and closely follows the Model I form of intergovernmental agreement, as initially released by the US Treasury in late July 2012. This form of agreement provides for reciprocal information exchange between the relevant countries and enables financial institutions in Ireland, in this case, to comply with FATCA by collecting and providing the required information directly to the Irish Revenue Commissioners (rather than to the IRS).
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