IRS updates IDES Technical FAQ

On 9 January 2020, U.S. Internal Revenue Service (“IRS”) updated its Frequently Asked Questions (“FAQs”) IDES Technical (Link). Question E25 in the section “Data Encryption and Security” has been updated to support users in understanding the respective requirements:

Question E25: Why did I receive an “Invalid Certificate” alert in the COMMENTACK field?

The answer to question E25 provides reasons and resolutions to the following three errors:

  • “8522 errors: Communications error with the Certificate Authority”
  • Invalid/Revoked/Superseded Digital Certificate
  • Online Certificate Status Protocol (OCSP) Invalid Certificate Path

CITT Compare Tool Update: Data updated for Australia, Bulgaria, Cyprus, Egypt, India, Ireland, the Isle of Man, Jordan, Lebanon, Malta, Moldova, Romania, Saudi Arabia, Sweden, Thailand, Turkey, the United Arab Emirates and Ukraine

On 7 January 2020, PwC’s CITT Compare Tool was updated to include the latest content from 18 countries. The include: Australia, Bulgaria, Cyprus, Egypt, India, Ireland, the Isle of Man, Jordan, Lebanon, Malta, Moldova, Romania, Saudi Arabia, Sweden, Thailand, Turkey, the United Arab Emirates and Ukraine. Please take this opportunity to re-run reports for those countries and use the latest information within your projects.

Liechtenstein amends AEOI Regulation

On 17 December 2019, the Liechtenstein Tax Authority issued Gazette No.374 amending the regulation of Automatic Exchange of Financial Account Information (“AEOI”) under the Common Reporting Standard (“CRS”) (Link-German)

The following three amendments have been made:

  • Article 4 (1) f.: changing the definition from “a capital deposit account for the purpose of establishing legal entities” to “a capital payment account for the purpose of establishing legal entities, provided that the establishment is completed within 90 days of the opening of the capital payment account and the paid-up amount has been credited to the legal entity;”.
  • Article 4 (1) h: Repeal of accounts of an association founded and organized in Liechtenstein, which does not pursue economic purposes from the list of exempt accounts.
  • Gazette No. 374 also features the current list of Participating Jurisdictions including the recent changes discussed in an early December Blog post (Link-Blog).

For a comparison, please view the version effective until 31 December 2019 (Link-German), and the amended version which came into effect on 1 January 2020 (Link-German).

Luxembourg publishes updated CRS FAQ

On 8 January 2020, the Luxembourg Tax Authorities (“LTA”) released updated Common Reporting Standard (“CRS”) Frequently Asked Questions (“FAQs”) (Link-French).

For more information on the CRS and the Foreign Account Tax Compliance Act (“FATCA”) in Luxembourg, the LTA provides a general information webpage on electronic exchanges in Luxembourg (Link-French).

Malta updates Guidelines on Automatic Exchange of Financial Account Information

On 2 January 2020, the Commissioner for Revenue in Malta published updated guidelines on the Automatic Exchange of Financial Account Information (Link). These guidelines include the following changes:

  • A clarification on entity classification pertaining to Cell Companies in line with the previous determinations issued by the Commissioner for Revenue.
  • The elimination of Holding and Treasury Company FI in FATCA. In this regard, Holding and Treasury Companies of FIs which do not fall within the definition of a Financial Institution are no longer deemed as Financial Institutions.
  • Clarification on Distributed Ledger Technology Assets to align it with the Guidelines issued by the Commissioner for Revenue on this matter for tax purposes.
  • More complete notes on Registration and Modifications of Domestic Registrations and the introduction of guidance on the cancellation of domestic registration and GIIN.
  • Clarifications on reporting obligations pertaining to structures with underlying structures which do not have a separate legal personality.
  • The definition of Passive Income has been aligned in its entirety with the Income Tax Act to ensure more certainty.
  • Current CBI / RBI Guidelines will be extended to FATCA.
  • Changes in deadlines limited to the “Excel Spreadsheet” Submissions.
  • Detailed Guidelines on the Completion of Data Elements.
  • Updated information on Recalcitrant Accounts / Undocumented Accounts.

The related Maltese press release (Link) and more information on FATCA (Link) and CRS (Link) in Malta can be found on the Maltese Revenues website.

TAS releases 2019 Annual Report to Congress

On 7 January 2020, the Taxpayer Advocate Service (“TAS”) released its 2019 Annual Report to Congress (Link).

Besides other legislative recommendations, the TAS demands harmonization of reporting requirements for the Foreign Account Tax Compliance Act (“FATCA”) (Link).

TAS is an independent organization within the U.S. Internal Revenue Service (“IRS”). The annual report to congress creates a dialogue at the highest levels of government to address taxpayers’ challenges, protect taxpayers’ rights, and ease taxpayers’ burden.

Dutch banks begin freezing accounts of Americans missing U.S. TIN

Beginning in 2020, several Dutch Banks began freezing accounts of Americans where U.S. Tax Information Numbers were missing or not available (Link-Dutch).

In 2019, the Dutch Banking Association repeatedly reminded so called Accidental Americans to provide their U.S. Social Security Numbers and TINs. In a released Youtube video (Link-Dutch), the Dutch Banking Association explained that those Accidental Americans stand to lose access to their bank accounts at the end of 2019.

IRS publishes updated FAQs on FATCA Registration System and on IRS FFI List FAQs

On 10 December 2019, the U.S. Internal Revenue Service (“IRS”) updated its Frequently Asked Questions (“FAQs”) on the Foreign Account Tax Compliance Act (“FATCA”) Registration System (Link). The FAQ were updated to add information on how to receive FATCA Registration System Technical Support and on how to submit comments about FATCA compliance.

The FATCA Registration System is a secure, web-based system that users may use to register, renew their agreement, and certify, for themselves and associated entities (if any) online.

In addition, on 21 December 2019, the IRS FFI List FAQs were updated accordingly (Link).

Isle of Man issues Industry Advisory Notice on AEOI

On 31 December 2019, the Isle of Man Treasury released an Industry Advisory Notice to all Isle of Man Financial Institutions and third parties to provide important updates with respect to the Automatic Exchange of Information (“AEOI”) (Link).

  • The list of Isle of Man Reportable Jurisdictions that Isle of Man Financial Institutions can rely upon for 2019 reporting can be found in Appendix I of this notice. Isle of Man Financial Institutions and Third Parties reporting on behalf of Isle of Man Financial Institutions are reminded that they should only report in respect of Financial Accounts held by Individuals, Entities or Entities with Controlling Persons resident in the jurisdictions included in the Isle of Man Reportable Jurisdiction list for the year in question.
  • A provisional list of Isle of Man Reportable Jurisdictions that Isle of Man Financial Institutions can rely upon for 2020 reporting can be found in Appendix II of this notice.
  • Isle of Man Financial Institutions are reminded that they are required to treat ‘managed’ Investment Entities, (or branches thereof) that are resident in (or located in) any Non-Participating Jurisdictions, as Passive NFEs and therefore report on the Controlling Persons of such entities that are Reportable Persons as defined in Section VIII, D.2 of the CRS.
  • The List of Participating Jurisdictions has been updated. Four jurisdictions have been removed and should now be treated as Non-Participating Jurisdictions. In addition, one jurisdiction has been added to the latest version of the Participating Jurisdiction list.
  • All jurisdictions listed in Appendix III of this notice will be treated as a Participating Jurisdiction for the purpose of the look through provisions for Investment Entities even though information may not be legally exchanged by the Isle of Man Competent Authority with that jurisdiction until the appropriate Agreements are put in place.

Guidance Note 53 on the Common Reporting Standard (“CRS”) (Link) will be updated within the next days accordingly.

Denmark issues updated CRS FAQs

On 12 December 2019, the Danish Tax Authorities (“SKAT”) updated their Frequently Asked Questions (“FAQs”) on the Common Reporting Standard (“CRS”) (Link-Danish). The FAQs can be found in the third drop-down menu. The following question has been updated.

Question 2: Which countries and jurisdictions will be covered by the 2020 exchange?

The answer provides a list of jurisdictions which will exchange information based on the Common Reporting Standard (“CRS”) Multilateral Competent Authority Agreement. In addition, jurisdictions with separate information exchange agreements are listed.

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