Panama and Mexico sign a Competent Authority Agreement

On 8 June 2017, the governments of Mexico and Panama signed a Competent Authorities Exchange of Tax Information Agreement which was announced by the Ministry of the Economy and Finance in Panama (Link-Spanish).  The agreement is the first Competent Authority Agreement signed by Panama and will allow for the exchange of financial account information next year corresponding to 2017. It will also make it possible to implement the commitments that the country has taken on as part of its commitment to the Standard Common Reporting (CRS).

Germany opens CRS reporting portal and revises the CRS Communication Handbook

On 1 June 2017, the Central Tax Office in Germany (“Bundeszentralamt für Steuern” or “BZSt”) issued a newsletter—CRS Infobrief 03/2017 (Link-German)—providing information to financial institutions regarding CRS reporting, the revised CRS Communications Handbook and information with respect to Controlling Persons.

The production environment for the transmission of CRS data was officially opened on 1 June 2017, including the single data entry mechanism on the BZStOnline portal (Link-German).  The deadline for submitting CRS reports to the BZSt is 31 July 2017, with no extension of this deadline foreseen.  Finally, as mentioned in the test manual (Link-German), access to the test environment is available until 7 July 2017.

In addition, the CRS Communication Handbook has been updated (Link-German) to include changes to Sections 3a, 3b and 4 to update for error codes and minor editorial changes. In addition, Section 2 has been published for the first time with information on managing single data submissions for CRS reporting.

Finally, the BZST has noted that the review criteria of the submitted reports has been improved after an issue was identified regarding the submission of reports of Controlling Persons. In this regard it should be considered rather urgently, that the validation rules concerning Controlling Persons of a Passive NFE have been strengthened to allow only limited account holder types.

Guernsey issues an update regarding CRS reporting

On 31 May 2017, the States of Guernsey released Bulletin 2017/4 (Link) where the Deputy Director (Compliance & International) of Income Tax states that “although the reporting deadline, in respect of the calendar year 2016 data, for the CRS will remain at 30 June 2017, the Income Tax Service will not consider applying compliance measures (including consideration of the imposition of penalties) against any Guernsey Financial Institution who successfully complies with the reporting and due diligence procedures, detailed in Regulation 4 of the Regulations, on or before 31 July 2017.”

It must be noted that the Bulletin explicitly states that “…the extension to the commencement of any compliance measures detailed above do not apply to the reporting requirements for US FATCA, in respect of the calendar year 2016 data.”

IRS reminds FFIs to renew their FATCA agreements on the FFI Registration System

On 7 June 2017, the U.S. Internal Revenue Service (“IRS”) reminded FFIs that the FATCA FFI Registration system has been updated to include the ability for FFIs to renew their agreement with the IRS. FIs that are required to renew their FFI Agreements should resubmit their registration applications by 31 July 2017, in order to be treated as having the FFI Agreements in effect as of 1 January 2017.  In addition, FIs around the world have been receiving messages from the IRS FATCA Registration System reminding them to update their agreements, if required. To make this process simpler, a “Renew FFI Agreement” now appears on the account home page.  The IRS has also provided the below overview regarding the renewal of FFI Agreements:

Renewal of FFI Agreement
Financial Institution’s FATCA Classification in its Country/ Jurisdiction of Tax Residence Type of Entity FFI Agreement Renewal Required?
Participating Financial Institution not covered by an IGA; or a Reporting Financial Institution under a Model 2 IGA Participating FFI not covered by an IGA Yes
Reporting Model 2 FFI Yes
Registered Deemed-Compliant Financial Institution (including a Reporting Financial Institution under a Model 1 IGA) Reporting Model 1 FFI operating branches outside of Model 1 jurisdictions Yes, on behalf of branches operating outside of Model 1 jurisdictions (other than related branches)
Reporting Model 1 FFI that is not operating branches outside of Model 1 jurisdictions; No
Registered deemed-compliant FFI (regardless of location) No
None of the above Sponsoring entity No
Direct reporting NFFE No
Trustee of Trustee-Documented Trust No