On 27 February 2018, Irish Revenue published updated Guidelines on the Common Reporting Standard (“CRS”) Naming Conventions (Link). The purpose of the Guidelines is to provide information on the CRS XML Forbidden and Restricted Characters. In addition, the Guidelines contain a description of permitted characters and combinations of characters for CRS XML files and predefined entity references. Additional information on CRS can be found on the Irish Revenue website (Link).
On 13 March 2018, the Internal Revenue Service (“IRS”) announced that the Offshore Voluntary Disclosure Program (“OVDP”) will be closed on 28 September 2018. By alerting taxpayers now, the IRS is encouraging any U.S. taxpayers with undisclosed foreign financial assets to use the OVDP before the program closes (Link).
On 14 March 2018, the Internal Revenue Service (“IRS”) announced that the Qualified Intermediary (QI), Withholding Foreign Partnership (WP), Withholding Foreign Trust (WT) System Application and Account Management System (“QI/WP/WT application and account management system”) will be available to accept QI/WP/WT certifications beginning early April (Link). All QI/WP/WT entities will receive an announcement on their message board when the certification function within the QI/WP/WT account management system deploys in early April. In preparation for the upcoming certification deployment, QI/WP/WT entities should verify that their account login credentials are up to date. More information is available on the IRS website (Link).
On 15 March 2018, the Internal Revenue Service (“IRS”) publishes new FATCA FAQs. The FAQs can be found in the General Compliance (Q23) subsection on the FATCA – FAQs General page (Link). The addition to these FAQs can be found below:
Q23. For the 2017 calendar year, will a withholding agent be subjected to interest, penalties, or additions to tax for failing to withhold and report by March 15, 2018, on a payment of a dividend equivalent made with respect to a derivative referencing a partnership?
For the 2017 calendar year, a withholding agent will not be subject to interest, penalties, or additions to tax with respect to a dividend equivalent payment made with respect to a derivative referencing a partnership provided that the withholding agent withholds and reports on Form 1042 and Form 1042-S with respect to the payment by September 17, 2018. In a case in which a withholding agent withholds after March 15, 2018, the withholding agent should file a Form 1042 (if the dividend equivalent payments are the only payments reportable for the year) or an amended Form 1042 by September 17, 2018, and write “Dividend Equivalent—Partnership” in the top center portion of the 2017 Form 1042. The withholding agent should also file Form(s) 1042-S or amended Form(s) 1042-S by September 17, 2018, with respect to the dividend equivalent payment. Finally, when depositing the tax withheld for a dividend equivalent payment made in 2017, the withholding agent must designate the payment as being made for the 2017 calendar year in accordance with the instructions to Form 1042.
On 13 March 2018, the Council of the European Union reached an agreement to enhance tax transparency and fight against cross-border tax planning (Link). The draft directive is the latest of a number of measures designed to prevent corporate tax avoidance. It will require tax intermediaries, such as accountants, tax advisors and lawyers, to report potentially aggressive schemes. The draft directive can be found on the European Council website (Link).
On 9 March 2018, the Organisation for Economic Co-operation and Development (“OECD”) issued new model disclosure rules for mandatory disclosure of OECD Common Reporting Standard (“CRS”) avoidance schemes. The model would require lawyers, accountants, financial advisors, banks and other service providers to inform tax authorities of any schemes they put in place for their clients to avoid reporting under the CRS. Additionally, under the model, reporting of structures that hide beneficial owners of offshore assets, companies and trusts is required. The OECD also hopes to deter the design, marketing and use of these arrangements and schemes and bolster the overall integrity of the CRS (Link).
On 12 March 2018, Serbia joined the Global Forum on Transparency and Exchange of Information for Tax Purposes in order to fight against tax evasion through international tax cooperation. Being the 149th member of the Global Forum on Transparency and Exchange of Information for Tax Purposes, Serbia commits to the exchange of information on request and automatic exchange of information (Link).
On 7 March 2018, PwC’s CITT Compare Tool was updated to include the latest content from Bulgaria, Hungary, Ireland, Luxembourg, Montenegro, Morocco, Romania, Russia, Serbia, Singapore, Slovakia, South Korea, Sweden and Ukraine. On 8 March 2018, PwC’s CITT Compare Tool was also updated to include the latest content from Canada and China. Please take this opportunity to re-run reports for those countries and use the latest information within your projects.
On 1 March 2018, the Government of Bermuda released an updated version of its Tax Information Reporting Portal User Guide (Link). The purpose of the guide is to provide an overview of the most used functionalities in the Bermuda Tax Information Reporting Portal with respect to Reporting Entities meeting their reporting obligations under the OECD Common Reporting Standard (“CRS”) and Country-by-Country Reporting (“CbC”). After the Bermuda Ministry of Finance transmits CbC filings submitted via the Bermuda Tax Information Reporting Portal to the various Reportable Jurisdiction Competent Authorities, the receiving jurisdiction will review and respond to indicate whether the filing is accepted as-is or if they have found errors with the submitted data. Therefore, the new Section 9 supports the user in “Reviewing and Correcting Errors from Partner Jurisdictions (CbC)”.
Furthermore, Section 13 regarding the change of the Primary User was updated.
On 1 March 2018, in reaction to the new functionalities of submitting a Primary User Change Notice via the portal by existing Primary or Secondary Users, the Government of Bermuda also issues an updated version of its Tax Information Reporting Portal Frequently Asked Questions (“FAQs”) (Link). Version 3.0 of the Tax Information Reporting Portals FAQs now contains the updated question “General Q2 – How do I change my Primary User?”