Foreign Account Tax Compliance Act (FATCA)
Countdown to compliance
U.S. Treasury & IRS release proposed regulations
On February 8, 2012, the U.S. Treasury and the IRS released the proposed regulations for the Foreign Account Tax Compliance Act (“FATCA”) - REG 121647-10.
Our team of FATCA specialists have reviewed and analysed the draft FATCA regulations issued by the IRS and have focused in particular on comparing the new or amended impact of these regulations with preliminary guidance previously provided. While the draft FATCA regulations provide some important reliefs, FATCA will continue to present significant compliance and operational challenges. Financial institutions must react quickly, drawing on operational, finance, risk, compliance, tax and legal expertise to ensure that they are able to submit their FATCA applications by 30 June 2013.
The following links provide further insights into the changes included in the draft FATCA Regulations.
View Frequently Asked Questions and Answers (PDF)
Six Takeaways from Proposed FATCA Rules Issued by the U.S. Treasury Department and IRS
The IRS website links provide further information on the guidance:
News release issued by the IRS (8 February 2012)
FATCA proposed regulations (8 February 2012)
Please feel free to contact a member of our Irish FATCA team who would be happy to assist with any queries you may have on the topic or provide any other assistance with your FATCA efforts.
You can also visit our FATCA Resource Library for more information.
About FATCA
The Foreign Account Tax Compliance Act (FATCA) is a new US reporting and withholding regime, the aim of which is to ensure tax compliance among US persons who hold offshore accounts. FATCA seeks to enforce reporting of US held foreign accounts by mandating 30% withholding on US source income (including gross sales proceeds), should any account holder or Foreign Financial Institution (FFI) not comply.
FATCA applies to all types of Foreign Financial Institutions including banks, brokers, insurance companies and investment funds. FATCA will impose a significant compliance burden on foreign institutions in terms of building systems and processes to identify/verify customer accounts, obtain further customer details, report account activity and track US payments for cases of withholding.
FATCA was signed into law on 18th March 2010 and will become effective from 1st July 2013, by which time all Foreign Financial Institutions must have entered into a compliance agreement with the US Treasury in order to avoid any withholding on US source income. Following the publication of Notice 2011-53, a number of transitional rules apply.
Deloitte has developed a FATCA Resource Library to help companies understand the impacts to their business. For queries please contact our Irish FATCA team.
Contact us
Deirdre Power
Partner, Tax
T: +353 1 417 2448
Paul Reck
Partner, Tax
T: +353 1 417 2470
Conor Hynes
Partner, Tax
T: +353 1 417 2205
Or any member of our FATCA team