Revised timeline for Cayman Reporting Financial Institutions

On 11 May 2015, in response to continued system development and ongoing maintenance issues, the Cayman Department for International Tax Cooperation (DITC) issued an update (Link) revising the timeline for Cayman Reporting Financial Institutions. Under the new guidance, Cayman Reporting Financial Institutions must complete the required notification and FATCA year-end reporting by Thursday, 21 May and Friday, 12 June respectively. The update is expected to provide flexibility to the financial services industry in satisfying its FATCA reporting requirements under the terms of the U.S-Cayman Islands FATCA IGA.

Polish President signed a bill to ratify the Poland – U.S. IGA

On 4 May 2015, President Bronislaw Komorowski signed a bill ratifying the agreement with the United States concerning enforcement of the Foreign Account Tax Compliance Act (FATCA), which provides a basis for the exchange of information about income and accounts of tax residents between the United States and Poland.  The implementation process has not been finalised as the bill implementing the IGA (which is different from the bill on ratification) is still within the legislative process.

OECD Convention on Mutual Administrative Assistance in Tax Matters soon to be implemented into German law

On 1 May 2015, the German government submitted a draft bill to the German Bundesrat for the implementation of the OECD Convention on Mutual Administrative Assistance in Tax Matters from 25 January 1988 and the amending protocol from 27 May 2010 into German law (Link). Accordingly, the legislative procedure has been initiated. It is very likely that the convention and the protocol will soon become binding German law, allowing a wide number of states to obtain the benefits of a cross-border cooperation in tax matters.  The draft bill aims at the fight against tax evasion, the avoidance of double taxation and ensures a fair and simplified cooperation regarding cross-border tax collection or enforcement of tax demands. At the same time, the Convention and the Protocol allow for revisions to the standards of local law, especially with regard to data protection rights.

In addition, the draft bill covers administrative assistance, e.g. exchange of information, including simultaneous tax examinations and participation in tax examinations abroad. Article 6 of the Convention allows an automatic exchange of information based on predefined categories which would be determined by mutual agreement between two or more parties. The Competent Authority Agreement, as part of the OECD Common Reporting Standard Initiative, could be such mutual agreement. However, it is yet unclear how this potential new law will interact with other treaties, for example with the FATCA Intergovernmental Agreements, or the EU Directive 2014/107/EU regarding mandatory automatic exchange of information in the field of taxation from 9 December 2014.

IRS Planned Maintenance

Due to planned maintenance, the FATCA International Data Exchange Service (IDES) will be unavailable from 13:00 Eastern Daylight Time (EDT) (UTC/GMT -4) on Saturday, 23 May 2015 until 16:00 EDT on Monday, 25 May 2015 due to an annual power outage.

IDES Testing Session Opens

The FATCA International Data Exchange Service (IDES) opens for testing from Monday, 1 June 2015 at 12:00 (UTC/GMT -4) to Monday, 8 June 2015 at 12:00 EDT. The test session will be open to users that have completed IDES enrollment by Thursday, 28 May 2015 at 17:00 EDT.

In order to complete the enrollment process, an IRS-issued GIIN, FIN or HCTA Entity ID, a username, and a valid certificate will be required.  IDES does not accept wildcard certificates. The FATCA IDES Resources web page (Link) contains a list of recommended certificates authorities. Enrolled users will receive an email with a link to the IDES test server web application and SFTP.  For further assistance with enrollment, the IDES Help Desk (Link) is available.

Mexico FATCA Reporting postponed – Now due 15 September 2015

The Mexico-US intergovernmental agreement to implement FATCA requires financial institutions who are located or resident in Mexico such as a banks, asset managers, insurance businesses or fiduciaries (among others) to report financial information on certain accounts owned directly or indirectly by U.S. persons, to the Mexican Tax Authorities (Servicio de Administración Tributaria or SAT).

The filing deadline for the first of these reports was originally set at 31 May 2015, however, the Mexican Tax Authorities have this week announced on their website a revised deadline of 15 September 2015. This will shortly be published in the Official Gazette.

The first FATCA reports must now be submitted by 15 September 2015 and will include information such as:

  • Name, address and tax reference number of the client
  • Average monthly account balance or value and account number

Both entities and individuals will need to be reported. So, if you have any clients who are a) U.S. individuals; b) U.S. entities; or c) non-U.S. entities controlled by U.S. individuals or U.S. entities (“U.S. clients”), you will need to be ready to report by 15 September 2015.