CITT Compare Tool Update: Data updated for Bahrain, Belgium, Israel, Ireland, Italy, Mauritius, Poland, Singapore and Switzerland

On 16 August 2017, PwC’s CITT Compare Tool was updated to include the latest content from Bahrain, Belgium, Israel, Ireland, Italy, Mauritius, Poland, Singapore and Switzerland. Please take this opportunity to re-run reports for those countries and use the latest information within your organizations.

U.S. signs CAA with Italy

The U.S. has signed a Competent Authority Arrangement (“CAA”) with Italy (Link) in accordance with the IGA signed between these jurisdictions (Link). In general, a Competent Authority Arrangement is a bilateral agreement between the U.S. and a treaty partner to clarify or interpret treaty provisions (Link). These CAAs establish the procedures for the automatic exchange obligations and for the exchange of information between these jurisdictions.

Reminder: Deadline for notifying Hong Kong authorities is 3 October 2017

According to the Hong Kong CRS legislation (Link), reporting financial institutions that have at least one reportable account identified by early July 2017, must notify the Hong Kong tax authorities accordingly by 3 October 2017 (Link). This deadline seems rather early, having in mind that 2017 is the first year of the CRS implementation.

Another important requirement concerns the necessity for service providers to obtain a Hong Kong business registration number in order to access the Hong Kong CRS Portal.

IRS publishes Notice 2017-42 deferring the effective date for portions of the regulations under Section 871(m)

On 4 August 2017, the Internal Revenue Service (“IRS”) and the US Department of the Treasury published Notice 2017-42 (“Notice”) deferring for another year the effective date for portions of the regulations under Section 871(m) of the Internal Revenue Code (Link). The Notice extends the relief provisions currently in effect under Notice 2016-76, Rev. Proc. 2017-15, and the 2017 Section 871(m) regulations.

The Notice provides the following:

  • Transactions in-scope based on their delta through the end of 2018 are limited to ‘delta one’ transactions. As a result, transactions with a delta less than 1 but greater that .8 (delta .80 transactions) will not be in scope until 1 January 2019;
  • The simplified combination rule will continue to apply for withholding agents until 31 December 2018;
  • For the deferral of withholding on actual and deemed dividends paid to qualified derivatives dealers (QDDs) until 1 January 2019; and,
  • For the extension of the good faith periods for the implementation of Section 871(m).

For more information, please read PwC’s Tax Insights from Financial Markets.

Italy issues Regulation to implements the CRS Ministerial Decree

On 4 July 2017, the Italian Revenue Agency (“IRA”) issued Regulation that implement the CRS Ministerial Decree dated 28 December 2015 (“CRS Regulation”) (Link-Italian). The CRS Regulation provides, among others, certain significant information:

  • The CRS reporting deadline has been extended to 21 August 2017, as published on our CITT Blog on 7 July 2017;
  • Financial institutions have the possibility to submit reports within the period of 15 days after the reporting deadline, i.e. until 5 September 2017 (Link-Italian); and,
  • Financial institutions must register on the “FATCA/CRS” section of the Electronic Registry of addresses (“REI: registro elettronico degli indirizzi”) in the Tax Register (“Anagrafe tributaria”) by 18 September 2017.

Additional technical information can be found in the attachment no. 2 of the CRS Regulation (Link-Italian).

Indonesia adopts law enabling Tax Office to legally investigate Indonesian taxpayers hiding their wealth overseas

On 27 July 2017, the House of Representatives of Indonesia passed a Regulation in Lieu of Law (Perppu) No. 1/2017 into law (Link-Indonesian). This Regulation enables Tax Office to legally investigate Indonesian taxpayers hiding their wealth overseas and to automatically obtain financial data of bank customers from the respective financial institutions.

Israel issues Draft CRS Regulation

On 8 June 2017, the Israel Tax Authority (“ITA”) issued Draft CRS Regulation which has recently been released (Link-Hebrew). According to this Draft, the CRS reporting deadline is 31 July. It should be noted that Israel remains one of the signatories to the OECD Multilateral Competent Authority Agreement on Automatic Exchange of Financial Account Information with intended first information exchange date by September 2018 (Link).