News Alert available only to PwC’s CITT Compare Tool Users beginning in 2018

From January 2018, only subscribers to PwC’s CITT Compare Tool will receive full News Alert via e-mail and the News ticker in the Tool. All other subscribers will receive a shortened version of the News Alert containing only the Headlines.

PwC’s CITT Compare Tool assists users in addressing the complexity of the automatic exchange of information regimes, appreciating the regulatory differences across countries and giving the users the functionality and up-to-date information they need. The Tool and further information can be found on the PwC Portal (Link), including overviews of other solutions within this platform.

The Netherlands issues guidance on FATCA and CRS reporting for the calendar year 2017

The government of the Netherlands has issued guidance on the Foreign Account Tax Compliance Act (“FATCA”) and Common Reporting Standard (“CRS”) reporting for the calendar year 2017. For easy reference, we have provided an overview of the Guidance on our CITT News Blog.

The Guidance contains:

  • preliminary list of reportable countries for 2017 reporting,
  • the updated reporting manuals for reportable years 2017 and 2018 and
  • the deadlines for FATCA and CRS reporting.

For more information see PwC’s FS NewsFlash from the Netherlands on our Blog.

OECD seeking stakeholder input on model mandatory disclosure rules to disclose details of certain CRS avoidance arrangements or offshore structures

On 11 December 2017, the OECD has released a consultation document seeking stakeholder input on model mandatory disclosure rules for intermediaries (or in some circumstances the reportable taxpayer) to disclose details of certain Common Reporting Standard (“CRS”) avoidance arrangements or offshore structures (Link).

The proposed rules broadly provide:

  • a ‘generic hallmark’ that identifies any arrangement for which it is reasonable to conclude that it is designed to, marketed as or has the effect of, circumventing CRS Legislation or exploiting an absence thereof
  • a ‘specific hallmark’ for CRS Avoidance Arrangements that provides examples of specific arrangements that would be treated as reportable
  • a hallmark for reportable offshore structures that “supplements the specific hallmark for CRS Avoidance Arrangements … by specifically identifying those features of offshore structures that are commonly used to hide the identity of the beneficial owner”, beginning with the reference to it being a passive offshore vehicle that is held through an opaque ownership structure.

In summary:

  • The model rules are intended to target promoters and service providers with a material involvement in the design, marketing or implementation of a CRS avoidance arrangements or offshore structure.
  • The proposed rules would require such intermediaries to disclose information on the scheme to their national tax authority, usually within a 15-day period (although there is a catch-up for arrangements entered into after 15 July 2014 but prior to the effective date of the rules).
  • The rules contemplate that information on those schemes (including the identity of any user or beneficial owner) would then be made available to other tax authorities in accordance with the requirements of the applicable information exchange agreement.

IRS releases updated QI/WP/WT FAQs

On 8 December 2017, the Internal Revenue Service (“IRS”) released updated FAQs for Qualified Intermediaries (“QI”), Withholding Foreign Partnerships (“WP”) and Withholding Foreign Trusts (“WT”) (Link). Questions 17, 18 and 19 under New Applications/Renewals and questions 1 and 2 under Certifications and Periodic Reviews have been updated to support users in understanding the QI/WP/WT registration process. The new FAQs include the following questions:

  • Q1: Can a QI that is a QDD apply for a waiver of the periodic review with respect to its QI activities that are not QDD activities if its applicable certification period ends in 2017 or 2018 and it otherwise meets the requirements of section 10.07 of the QI agreement?
  • Q2: How should the independence standard for an external reviewer of a QI, WP, or WT be applied for periodic review years prior to 2018?
  • Q17: Does a QI that is not currently a QDD have to wait for its QI agreement to expire to apply for QDD status for its home office?
  • Q18: If a QI applies for and is granted QDD status for its home office outside of the new application or renewal process, when will its QDD status become effective?
  • Q19: Can a foreign reverse hybrid entity that is a non-financial foreign entity (NFFE) that receives personal services income apply (or submit a renewal) to be a withholding foreign partnership (WP) under the WP agreement effective on or after January 1, 2017?

Dutch government issues guidance on FATCA and CRS reporting for the calendar year 2017

The Dutch government has issued guidance on the Dutch FATCA and CRS reporting for the calendar year 2017. For easy reference, we have provided an overview of the guidance below. The guidance contains the preliminary country list of reportable countries for 2017 reporting, the updated reporting manuals for reportable years 2017 and 2018 the deadlines for the FATCA and CRS reporting.

Reporting deadlines, registration procedures and letters sent by the Dutch Tax Authorities
In October, the Dutch tax authorities published the 2018 reporting deadlines in the Netherlands. The statutory reporting deadline is 31 January annually. However, in line with last year the Dutch tax authorities have provided extended deadlines. A generic extension to 6 February 2018, for Financial Institutions that have a domestic information reporting obligation, and a prolonged extension for payments and savings products under the Dutch domestic information reporting rules to 30 April 2018. Financial Institutions that solely have a FATCA and/or CRS reporting obligation have to ultimately submit on 1 August 2017, although it is advised to submit in an earlier stage.

Dutch Financial Institutions that have not yet reported under FATCA or CRS in a previous year, are required to register themselves with the Dutch tax authorities prior to submitting the report (generally, a few days are required to process the registration). The Dutch tax authorities will not accept the FATCA and/or CRS reports without upfront registration. Financial Institutions can register via the following link: https://www.gegevensportaal.net/fatca/aanmelden/. Financial Institutions need to indicate in the portal whether they will report under FATCA, CRS or both and the total number of accounts to be reported.
Dutch Financial Institutions, that reported under FATCA last year, may have – in line with last year – received a letter from the Dutch tax authorities in which they are requested to provide an indication of the number of reportable accounts.

CRS reporting
The 2017 CRS reporting deviates from the 2016 reporting in the following aspects:

  • The CRS report over 2017 requires to report on tax residents in 106 jurisdictions (see the attached list for a full overview of reportable jurisdictions). For reference purposes, the number of reportable jurisdictions for the reportable year 2016 was 46;
  • Please note that the pre-existing account review deadline in the Netherlands is 31 December 2017. As such all financial account holders will need to be reviewed by year end.

FATCA reporting
Although Financial Institutions have already reported under FATCA during 2015 to 2017, reporting will deviate from earlier filings. The main change in FATCA reporting is:

  • Reporting on NPFFIs is no longer required

Dutch reporting schema
The FATCA and CRS reports can be submitted together in one file. The Dutch reporting schema for FATCA and CRS deviates from both the standard 8966 FATCA reporting schema as well as the CRS XML reporting schema issued by the OECD. Therefore, Dutch Financial Institutions are encouraged to assess if they are capable to report in accordance with the Dutch reporting schema.

The Dutch reporting schema requirements have been published in manuals on cggp.nl (please note that registration is required to be able to download the manuals). The manuals are only available in Dutch. Please note that compared to last years template a new field was added to the report (indication undocumented).

In order to be able to submit the reports (in the requested Dutch XML format), Financial Institutions also need to make sure that a digital connection with the Dutch tax authorities is established.

How can PwC assist you
PwC has created a front to end FATCA and CRS reporting solution. We can assist with

  • Assessing whether reporting for FATCA and/or CRS is required in the Netherlands;
  • Registering Financial Institutions with the Dutch Tax Authorities in the Netherlands in case there is a reporting obligation;
  • Creating the xml-file and submit these via our secure portal to the Dutch tax authorities. The report together with the full trail of submission will remain accessible at all times.

In addition to the reporting solution, PwC can provide assistance with data extraction and filtering and any other questions around reporting or generically on FATCA and CRS.

Should you have any questions or want to know more about the reporting solution, please contact your PwC contact or any of the experts mentioned below.

Remco van der Linden
Tel: +31 (0)88 792 74 85 | Mobile: +31 (0)6 20 40 22 91 | remco.van.der.linden@pwc.com

Job Hoefnagel
Tel: +31 (0)88 792 76 10 | Mobile: +31 (0)6 23 83 70 43 | job.hoefnagel@pwc.com

Joep Bertrams
Tel: +31 (0)88 792 72 95 | Mobiel: +31(0)6 21 51 86 81 | joep.bertrams@pwc.com

Robert Jan Meindersma
Tel: +31 (0)88 792 61 86 | Mobile: +31 (0)6 83 60 84 41 | robert.jan.meindersma@pwc.com

News Alerts available to PwC’s CITT Compare Tool Users only beginning in 2018

From January 2018, only subscribers to PwC’s CITT Compare Tool will receive full News Alerts via e-mail and the News ticker in the tool.  All other subscribers will receive a shortened version of the News Alert containing only the headlines.

PwC’s CITT Compare Tool assists users in addressing the complexity of the automatic exchange of information regimes, appreciating the regulatory differences across countries and giving the users the functionality and up-to-date information they need. The Tool and further information can be found at the PwC Portal (Link), including overviews of other solutions within this platform.

Canada updates its CRS XML Schema

On 14 November 2017, the Canada Revenue Agency (“CRA”) updated the Common Reporting Standard (“CRS”) XML Schema for filing returns in 2018. The recent changes contain an update on the XML specifications for Part XIX information returns in 2018, related to the 2017 tax year (Link). Part XIX was added to the Income Tax Act in 2016, implementing the CRS due diligence and reporting obligations in Canada. This legislation, together with the administration by the CRA, will allow the CRA to exchange financial account information with participating jurisdictions beginning in 2018.