July 12, 2013: IRS Delays FATCA Deadlines and the Opening of the FFI Registration Portal
Foreign Account Tax Compliance Act (FATCA)
IRS delays FFI registration portal opening and pushes back deadlines
The IRS has released Notice 2013-43 pushing back the Foreign Financial Institutions (FFI) Registration Portal opening and extending most of the FATCA deadlines established by the final regulations. The FFI Registration Portal is now projected to open on August 19, 2013, a little over a month later than previously planned. The IRS also indicated that the opening will be a soft launch, when FFIs will get the chance to start setting up their profiles and adding entities without actually committing to signing or registering, until January 1, 2014. On or after January 1, 2014, FFIs will be able to finalize their registrations through April 25, 2014 to appear on the first IRS FFI list to be posted on June 2, 2014. Generally, all prior deadlines related to the FFI agreement effective date, the GIIN registration deadlines for the first list, the last date to register for GIIN before withholding begins, the effective date of FFI agreement for registrations before withholding begins, and the transition period for affiliated group rule have been pushed back 6 months.
The IRS also extended other compliance deadlines including withholding, onboarding, and preexisting account remediation by 6 months. This extension will be applied to current and future FATCA Intergovernmental Agreements (“IGAs”) through the coordination provision added to recent IGAs and the new models recently released. IGAs signed before the coordination provision was added will adopt the provision through the most favored nations clause included in all IGAs. Another extension that was unexpected and also applies to current Chapter 3 documentation is the 6 month extension of the expiration for withholding certificates and documentary evidence set to expire at the end of this year.
These extensions should come as a welcome relief to entities impacted by FATCA given the delay in IGA signings and the delay in registration guidance. A summary of the impacted deadlines is included below and a copy of the IRS notice is attached
Updated timeline summary
|FATCA Compliance Action Items||Old Date||New Date|
|Registration Portal Projected Opening Date||Jul 15, 2013||Aug 19, 2013|
|GIIN Registration Deadline for first 2014 list||Oct 25, 2013||Apr 25, 2014|
|First 2014 GIIN list||Dec 2, 2013||Jun 2, 2014|
|Last date to register for GIIN before withholding begins1||Dec 31, 2013||Jun 30, 2014|
|Effective date of FFI Agreement for registrations before withholding begins||Dec 31, 2013||Jun 30, 2014|
|Transition period for affiliated group rule||Jan 1, 2016||No Change|
|USWA and FFI begin new account onboarding||Jan 1, 2014||Jul 1, 2014|
|Cutoff date to determine preexisting account population2||Dec 31, 2013||Jun 30, 2014|
|Initial account balance determination date for de-minimis rules and high value account rule||Dec 31, 2013||Jun 30, 2014|
|USWA/FFI complete preexisting Prima Facie FFI accounts||Jun 30, 2014||Dec 31, 2014|
|USWA/FFI complete all other preexisting entity accounts||Dec 31, 2015||Jun 30, 2016|
|FFI complete preexisting high value individual accounts||Dec 31, 2014||Jun 30, 2015|
|FFI complete all other preexisting individual accounts||Dec 31, 2015||Jun 30, 2016|
|Chapter 3, QI/WP/WT Agreements, and Foreign-Targeted Registered Obligation Rules||New expiration date for withholding certifications and documentary evidence for Chapter 3 that are set to expire this year||Dec 31, 2013||Jun 30, 2014|
|New expiration date for Qualified Intermediary, Withholding Partnership, and Withholding Trust agreements set to expire this year||Dec 31, 2013||Jun 30, 2014|
|End date of Notice 2012-20 transition rule to withholding agents paying interest on a registered obligation after March 18, 2012||Dec 31, 2013||Jun 30, 2014|
|Grandfathered obligation cutoff||Jan 1, 2014||Jul 1, 2014|
|Begin income withholding (excludes certain offshore payments of U.S. source income)||Jan 1, 2014||Jul 1, 2014|
|Begin offshore U.S. source income payment withholding||Jan 1, 2017||No Change|
|Begin gross proceeds withholding||Jan 1, 2017||No Change|
|Begin foreign -passthru payments withholding||Jan 1, 2017||No Change|
|Reporting||Calendar year(s) to report for U.S. Account reporting3||2013 & 2014||2014 (for U.S. account identified by December 31, 2014)|
1 Verification of a GIIN is not required for a Model 1 FFI prior to January 1, 2015. Model 1 FFIs will be able to register and obtain a GIIN beginning on January 1, 2014 but will have additional time beyond July 1, 2014 to register and obtain a GIIN to be included in the FFI list before January 1, 2015.
2 For participating FFIs it may also be the effective date of the FFI agreement if different than June 30, 2014. For registered deemed-compliant FFI it is June 30, 2014 or the date the FFI registers and receives a GIIN.
3 All other reporting deadlines remain unchanged.
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