FATCA Online Registration System: Sponsoring entity financial institutions can register and obtain GIINs for sponsored entities

The Internal Revenue Service (IRS) on 20 August 2015, updated its website with information about a new feature that will allow sponsoring entity financial institutions to add sponsored entities to the Foreign Account Tax Compliance Act (FATCA) Online Registration System (Link) and obtain a global intermediary identification number (GIIN) for each sponsored entity.

Read more in our PwC Tax Insight

FATCA – General FAQs have been updated

On 14 August 2015, the IRS added a frequently asked question (“FAQ”) to the General Compliance section of the FATCA – FAQs General  section of their website (Link) – see FAQ Q11.  FAQ 11 addresses a method of transmitting a Form W-8 from a payee to withholding agent where the payee sends the withholding agent an email containing a link to a third party repository that allows the withholding agent to download an image or PDF of the Form W-8 that has been scanned and stored on the repository. The FAQ explains that the withholding agent may treat the Form W-8 as having been scanned and received electronically, provided that the withholding agent does not know that the email containing the link to the third-party repository has been transmitted by someone other than the payee or an agent of the payee.  Additionally, the FAQ indicates that because the email is sent to the withholding agent by the payee the Form W-8 is treated as being provided by the payee.

The withholding agent is still required to determine whether the form is valid and may be relied upon for purposes of chapter 3 or 4 and whether a change in circumstances affects its continuing reliance on the form.

The ability to transmit and receive a Form W-8 via a third party repository in this manner is a significant development as the IRS modernizes its rules in reaction to emerging practices.  This FAQ does not address the portion of the question related to “third party repository in a similar manner” directly.  Instead, the FAQ focuses on whether a payee is considered to have emailed a form and concludes that the form is  being presented by email and is considered provided by the payee directly.  This FAQ does not specifically address or provide further guidance about whether a link to a “third party repository in a similar manner” directly is the proper way for a withholding agent to obtain a Form W-8.  As such,  this FAQ presents a trap for the unwary that may be relying on an agent or third party data provider to obtain Forms W-8.

India issues notification on an amendment to the Income Tax to incorporate FATCA reporting

On 7 August 2015, the Indian Central Board of Direct Taxes announced that it had amended the Income-tax Rules, 1962, to incorporate the reporting requirements within the provisions of the India-US FATCA IGA (Link).  The amendment also includes instructions and details regarding Form 61B which will be used by Indian financial institutions to perform their required FATCA reporting.

Singapore releases general FATCA FAQs

On 11 August 2015, the Inland Revenue Authority of Singapore issued an updated version of the general FATCA FAQs (Link). One question was added, namely whether all accounts held by sole-proprietors should be treated as Individual Accounts. The Authority’s answer holds that for FATCA, only accounts held by sole-proprietorships that are owned by individuals (and not companies) should be treated as individual accounts.

IRS releases instructions for the preparation of XML files for adding multiple sponsored entities using a File Upload

On 10 August 2015, the IRS published a document that includes instructions on how to create an XML file “Adding Multiple Sponsored Entities using a File Upload” (Link). Further instructions on how to upload this file will be included in an updated FATCA Online Registration user guide to be issued in late 2015.

Indian government enacts FATCA rules – Reporting due 31 August 2015

On 7 August 2015, the Indian Government enacted rules relating to FATCA reporting in India and set the deadline for the 2014 reporting year as 31 August 2015.  The Indian Government signed an Intergovernmental Agreement (IGA) with the United States on 9 July 2015,  to implement the Foreign Account Tax Compliance Act (FATCA) in India (Link).

Link to PwC Tax News Alert

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