On 10 June 2016, PwC’s CITT Compare Tool has been updated to reflect recent regulatory news from Ukraine and Moldova. On 16 June another update was made to include Curacao and updated information for the Cayman Islands and Thailand. Please take this opportunity to re-run reports for those countries and use the latest information within your projects.
In June 2016, the Inland Revenue Board of Malaysia (“Lembaga Hasil Dalam Negeri Malaysia”) announced on its website that submissions of reportable information for the 2014 and 2015 tax years has been tentatively deferred until 30 June 2017 as the IGA with the United States is still to be finalized (Link). In addition, the announcement states that the date for submission of 2016 reportable information is also scheduled for 30 June 2017.
The Organisation for Economic Co-operation and Development (OECD) has released a June 2016 version of the CRS-related Frequently Asked Questions (Link). Some of the additions include clarification on indirect investment in real property (Question 4, Page 10) and on the term “managed by” (Questions 3 and 5, Page 10), among others.
On 1 June 2016, the Internal Revenue Service (“IRS”) announced, in the form of e-mailed advice, that FFIs who have agreed to reporting obligations should expect to submit their compliance certifications electronically (Link). Note that the referenced attachment was not attached.
On 8 June 2016, the Cayman Islands Department for International Cooperation announced that it would extend the deadline for FATCA and UK CDOT notification and reporting to 10 August 2016. The letter announcing this extension states: “Notifications and returns submitted on or before Wednesday, 10 August 2016 will not attract any adverse compliance consequences or enforcement measures.”
On 2 June 2016, the Internal Revenue Service (“IRS”) released the draft FATCA XML Schema v 2.0 (Link). This new version incorporates changes that were implemented by the Organisation of Economic Co-operation and Development (“OECD”) Common Reporting Standard (“CRS”) schema. The FATCA XML Schema v 2.0 will be used by all International Data Exchange Service (“IDES”) users starting beginning of January 2017. According to the IRS, the changes in version 2.0 include new defined string types, lengths and data types, new element for nil reports and closed accounts and new element and enumerated values for filer category.
The Internal Revenue Service (“IRS”) announced the testing periods for the FATCA International Data Exchange Service (“IDES”). According to the schedule on its website, IDES users should enroll online by 13 June 2016 (5 p.m. EDT) while the testing will be open from 16 June 2016 (at 8:00 a.m. EDT) to 30 June 2016 (at 5:00 p.m. EDT) (Link).
In June 2016, the U.S. signed a Competent Authority Arrangements (“CAA”) with Portugal (Link) and St. Vincent and the Grenadines (Link) in accordance with the IGA signed between these jurisdictions (Link-Portugal) (Link- St. Vincent and the Grenadines). 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). The CAAs establish the procedures for the automatic exchange obligations and for the exchange of information between these jurisdictions.
On 1 June 2016, at the launch of the OECD’s Latin American and Caribbean Regional Programme and during the OECD Ministerial Council Meeting, Jamaica and Uruguay signed the Multilateral Convention on Mutual Administrative Assistance in Tax Matters (Link) while Brazil “deposited its instrument of ratification” (Link). The Convention provides the platform for the exchange of information on request, spontaneous exchange, automatic exchange, tax examinations abroad, simultaneous tax examinations and assistance in tax collection. The total number of jurisdictions having signed this Convention are now 96.
On 26 May 2016, the Indian Central Board of Direct Taxes (CBDT) issued further clarifications on the implementation of FATCA and CRS after having pursued consultations with Indian Financial Institutions (“FIs”) (Link). The CBDT announced the following:
- Considering the difficulty of physically obtaining self-certification from account holders, CBDT has now provided an “alternative” channel, allowing FIs to obtain account-holders’ self-certification through internet banking platform from the user account where the customer has transaction rights;
- With regard to the issue of Tax Identification Numbers (“TIN”) or their functional equivalents, the CBDT has reiterated that a TIN is not required to be collected by FIs if it is not issued by the relevant jurisdiction in which the person is a tax resident. This includes the cases where a person is eligible to obtain a TIN, but has not obtained it yet. In such cases, however, the CBDT has suggested that FIs should make a note and seek the TIN once it is obtained;
- With regard to valuation guidelines to determine account balance/value of a custodial account for the purposes of reporting, CBDT has stated that the valuation of securities may be done at the values “regularly communicated by Depository (CDSL/NSDL) to the depository participants/brokers”.