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FATCA: A new disclosure and withholding regime

FATCA Key Dates - Review and stay on top of FATCA legislation and milestones

March 18, 2010

Hire Act passed including FATCA provisions — New rules became applicable to foreign securities lending transactions where the purpose is tax reduction or elimination

August 27, 2010

IRS issues Notice 2010-60 — Provides initial guidance describing the requirements to become a participating Foreign Financial Institution (participating FFI) including documentation due diligence procedures and reporting requirements (official publication in Internal Revenue Bulletin, September 13, 2010)


Under newly proposed U.S. Treasury Code Sections 1471 through 1474 and Notice 2013-43, effective for payments after June 30, 2014, generally all foreign financial institutions (FFIs) will be required to enter into disclosure compliance agreements with the U.S. Treasury (unless an exemption or FATCA Intergovernmental Agreement applies), and all non-financial foreign entities (NFFEs) that are not excepted under the regulations must report and/or certify their ownership or be subject to the same 30 percent withholding. This new reporting and withholding regime will ultimately impact current account opening processes, transaction processing systems and “know your customer” procedures utilized by foreign banks. Chief compliance officers, tax reporting heads and other key players within your organization will need to evaluate the potential impact of these regulations and develop a plan for managing and remediating any potential risk associated with Foreign Account Tax Compliance Act (FATCA) non-compliance.

Relevance and impact

The legislative intent of FATCA is to ensure there is no gap in the ability of the U.S. government to determine the ownership of U.S. assets in foreign accounts. As such, this revenue raising provision, which was originally enacted as a part of the Hiring Incentives to Restore Employment (HIRE) Act (Pub. L. No. 111-147), is expected to significantly impact the systems and operations of both U.S. and non-U.S. companies. While the FATCA guidance with respect to documentation and reporting has not been finalized to date, companies will likely need to make modifications to their internal systems, control frameworks, processes and procedures for timely compliance with these regulations on or before their effective date of July 1, 2014.

Take action now - Will risk intelligence be your asset or non-compliance your liability?

Don’t wait until these rules become effective to begin assessing your needs and associated costs for compliance. By performing the proper compliance risk assessment now and evaluating necessary modifications to your existing systems, your organization will be armed with the level of risk intelligence required to address compliance with FATCA’s new withholding and reporting regime.

Learn more

FATCA Resource Library: A library of latest FATCA developments.

To learn more about Deloitte's FATCA services, contact us at

As used in this document, “Deloitte” means Deloitte Tax LLP. Please see for a detailed description of the legal structure of Deloitte LLP and its subsidiaries. Certain services may not be available to attest clients under the rules and regulations of public accounting.

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