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.

India updates documents on FATCA and CRS reporting

On 27 and 31 December 2019, the Income Tax Department of India issued new versions of the Common Reporting Standard (“CRS”) and the Foreign Account Tax Compliance Act (“FATCA” related documents on their Download portal (Link).

The documents include new versions of:

  • Information Request Utility – Quick Reference Guide version 1.0
  • Information Request Utility User Guide version 1.1
  • Information Request Utility version 1.1

HMRC publishes update to International Exchange of Information Manual

On 30 December 2019, Her Majesty’s Revenue & Customs (“HMRC”) published updates to its International Exchange of Information Manual (Link). In addition to several formatting changes, the primary updates were made within the following sections:

Reportable Information: Reportable Jurisdictions (Link):

  • Amended to highlight that Kuwait is reportable in 2020
  • Changes for 2020 reporting year made to guidance.

Financial Accounts: Excluded Accounts: Retirement and Pension Accounts (Link):

  • Minor punctuation change
  • Change made to reflect intention to make non-registered pension arrangements reportable for CRS and DAC purposes with respect to the calendar year 2020 and subsequent years

Financial Accounts: Excluded Accounts: Tax Favoured Accounts (Link):

  • Changes made to reflect intention to make Premium Bonds, Fixed Interest Savings Certificates and Index Linked Savings Certificates reportable for CRS and DAC purposes with respect to the calendar year 2020 and subsequent years

Financial Accounts: Excluded Accounts: Retirement/Pension Accounts: Cross Border Pensions (Link):

  • Change made to reflect intention to make non-registered pension arrangements reportable for CRS and DAC purposes with respect to the calendar year 2020 and subsequent years

Miscellaneous: Documentary Evidence: Retention of Documents (Link):

  • Update to retention period, including change to 5 years

Due Diligence: New Individual Accounts: Introduction (Link):

  • Update to retention period, including change to 5 years

Common Reporting Standard: Participating Jurisdictions (Link):

  • 2020 Participating Jurisdictions added

Financial Accounts: Excluded Accounts: Introduction (Link):

  • Update of December 2019 added

Guernsey releases AEOI Bulletin 2019/5

On 31 December 2019, the States of Guernsey Revenue Service released Bulletin 2019/5 on the Foreign Account Tax Compliance Act (“FATCA”) and the Common Reporting Standard (“CRS”) (Link). The focal points are:

  • the provisional Reportable Jurisdictions for CRS 2019 Reportable Period
  • the provisional Reportable Jurisdictions for CRS 2020 Reportable Period
  • the revised Participating Jurisdictions list; and
  • the jurisdictions to which the Director sent information in relation to 2018 CRS data

In addition, the Bulletin states that the existing CRS Status Message XML Schema User Guide and the schema validations continue to apply for the 2019 data reporting. The IGOR User Guide for CbCR, CRS & FATCA is available to provide IGOR users with assistance with their reporting (Link). Registered financial institutions should check that their existing IGOR points of contact and their email addresses are current and correct.

The Bulletin supersedes any previous Reportable and Participating Jurisdiction Lists published by the Director.

Further information on the Automatic Exchange of Information (“AEOI”) can be found on the Revenue’s websites for FATCA (Link) and for CRS (Link).

Russia extends feedback deadline and updates the list with questions on the Russian Federal Tax Code

As previously reported, Russia requests feedback on a new Financial Institution checklist and the format of the report on customers (Link). On 30 December 2019, the relevant deadline to submit feedback has been change from 16 December 2019 to 25 January 2020. The relevant checklist has been updated accordingly on 30 December 2019 (Link-Russian).

In addition, also on 30 December 2019, the Federal Tax Service of Russia updated the list with questions on the application of certain chapters of the Russian Federal Tax Code (Link-Russian).

IRS releases Regulations Relating to Withholding and Reporting Tax on Certain U.S. Source Income Paid to Foreign Persons

On 2 January 2020, U.S. Internal Revenue Service (“IRS”) releases Regulations 85 FR 192 Relating to Withholding and Reporting Tax on Certain U.S. Source Income Paid to Foreign Persons (Link).

The document was published in the Federal Register and contains final regulations that provide guidance on certain due diligence and reporting rules applicable to persons making certain U.S. source payments to foreign persons, and guidance on certain aspects of reporting by foreign financial institutions on U.S. accounts. The final regulations affect persons making certain U.S.-related payments to certain foreign persons and foreign financial institutions reporting certain U.S. accounts.

This document also includes a limited number of technical corrections and conforming changes to final regulations under chapters 3, 4, and 61.

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