On 12 April 2019, the U.S. Internal Revenue Service (“IRS”) released the text of the “Agreement between the Government of the United States of America and the Government of the Republic of Serbia to Improve International Tax Compliance and to Implement FATCA” (“IGA”).
The IGA to implement Foreign Account Tax Compliance Act (“FATCA”) was signed on 10 April 2019 (Link).
On 15 April 2019, Her Majesty’s Revenue & Customs in the United Kingdom (“HMRC”) published a consultation document seeking views on the transposition of the Fifth Money Laundering Directive (Link). This consultation, inter alia, invites views and evidence on the steps that the government proposes to take to meet the United Kingdom’s (“UK”) obligation to transpose the directive (EU) 2018/843 (5MLD) into national law.
5MLD, among other things, requires obliged entities to apply customer due diligence when they have any legal duty in a calendar year to contact the customer for reviewing their relevant beneficial ownership information, or where the obliged entity has this duty under the EU Directive on Administrative Cooperation in the Field of Taxation (“DAC2”), which was transposed into UK law via the International Tax Compliance regulations, placing a common reporting standard (“CRS”) reporting obligation on UK financial institutions.
The closing date for comments to be submitted is 10 June 2019.
On 10 April 2019, Americans Citizens Abroad (“ACA”) wrote to Nancy Pelosi, Speaker of the House of Representatives, urging Congress to enact residency-based taxation and requesting immediate comprehensive hearings on the taxation of Americans abroad (Link).
American Citizens Abroad’s (ACA, Inc.) mission is to educate, advocate and inform both the US Government and US Citizens living and working abroad on issues of concern to the overseas American community (Link).
On 15 April 2019, the National Taxpayers Union Foundation (“NTUF”), releases a policy paper analyzing the first tax filing season including the reforms and reductions implemented through the Tax Cuts and Jobs Act (“TCJA”) (Link). The paper, which has been conducted and updated for nearly two decades states, that it will address the compliance burden taxpayers face this year, the impact on complexity from the enacted tax reform law. Thanks to the TCJA, business taxes were reduced from 35 percent to a 21 percent rate. However, there were trade-offs in complexity with the addition of complicated new international provisions.
For the NTUF the Foreign Account Tax Compliance Act (“FATCA”) still is a large complexity in the Tax Code. NTUF qualifies FATCA as an instrument, enforcing reporting requirements on foreign financial institutions, which has driven many to refuse to take on Americans as clients, imposing financial difficulties on U.S. citizens living in other countries.
The policy paper quotes Texas A&M University Law Professor William Byrnes, who estimated that repeal of FATCA would reduce revenues by $150 million annually while cutting compliance costs on the economy by $200 million. Consequently, FATCA imposes more burdens on the private sector than it raises for the U.S. government.
On 5, 10 and 11 April 2019, PwC’s CITT Compare Tool was updated to include the latest content from Canada, New Zealand, Poland, Singapore, Slovenia, Spain, Switzerland and the United Kingdom. Please take this opportunity to re-run reports for those countries and use the latest information within your projects.
In early 2019, the Polish Ministry of Finance published the 2019 Foreign Account Tax Compliance Act (“FATCA”) reporting form. The FAT-1(4).xml form must be used for reporting for 2018 FATCA data and can be found on the Polish Government website (Link).
On 5 April 2019, the Mauritius Revenue Authority issued a communique regarding the recent amendment to the Guidance Note on the implementation of the Common Reporting Standard (“CRS”) in Mauritius (Link). The updated Guidance can be found on the Revenue Authority’s website (Link). A redline version is also available to the public (Link).
In February 2019, the Aruba Revenue Authority (“Departamento di Impuesto”) released an updated List of Reportable Jurisdictions under the Common Reporting Standard (“CRS”). A total of 61 countries are on the list of jurisdictions that are to be treated as Reportable Jurisdictions for purposes of the CRS for the 2018 reporting period (Link). Financial Institutions are obliged to use the Aruba reporting environment (Multi Data Exchange Solution (“MDES”)), which went live on 27 August 2018, to upload their XML files (Link).
On 4 April 2019, the Ministry of Finance in Bermuda released an updated List of Reportable Jurisdictions under the Common Reporting Standard (“CRS”). With the newly added countries Antigua and Barbuda, Azerbaijan, Barbados, Monaco, Pakistan, Panama and Switzerland, a total of 62 countries are on the list of jurisdictions that are to be treated as Reportable Jurisdictions for purposes of the CRS for the 2018 reporting period, who will receive 2018 calendar year CRS information from Bermuda in 2019 (Link).
On 5 April 2019, the Inland Revenue Board of Malaysia (“IRBM”) announced the Common Reporting Standard (“CRS”) reporting deadline for the reporting year 2018 (Link). The deadline for submitting the CRS Report is 1 July 2019 to 31 August 2019. IRBM states, that there will be no further extension.
In addition, the CRS Hasil International Data Exchange Facility (“HiDEF”) submission opens for testing from 1 April 2019 to 28 June 2019.
Financial Institutions (“FIs”) that have completed their registration before 1 April 2019, can participate in the CRS testing from 1 April 2019. The FIs that have completed the CRS registration during the CRS testing period are also able to participate on the following day of their registration. To participate in the testing, FIs need to login to the CRS Test Window (Link).