Singapore signs Model 1A IGA with the U.S.

On 16 November 2018, the Inland Revenue Authority of Singapore released the text of the “Agreement between the Government of the Republic of Singapore and the Government of the United States of America to Improve International Tax Compliance and to Implement FATCA” (“IGA”).

The IGA to implement Foreign Account Tax Compliance Act (“FATCA”) was signed on 13 November 2018 (Link).

Taiwan amends application range for preexisting accounts and simplifies due diligence process under the CRS

On 1 November 2018, the Taiwan Ministry of Finance issued an announcement on changes regarding the exchange of information under the Common Reporting Standard (“CRS”).

The amendment of “Tai Cai Ji No. 10700642570” consists of three major updates:

  1. When the following conditions are met, a financial account managed by a Financial Institution (“FI”) may be considered as an existing account under Taiwanese law:
    1. The account holder holds a preexisting account, opened before 31 December 2018 in the same reporting FI or its related entity, which is also a reporting FI in Taiwan;
    2. The reporting FI and its related entity, which is also a reporting FI in Taiwan, treat the preexisting account and the new account that is opened by the account holder after 1 January 2019 as a single account when performing the due diligence and calculating the account balance;
    3. The reporting FI is permitted to satisfy Anti-Money Laundering / Know Your Customer (“AML/KYC”) procedures performed for the new account by relying on the AML/KYC performed for the pre-existing accounts; and,
    4. The opening of the new account does not require the provision of new, additional or amended customer information by the Account Holder other than for purposes of the Common Reporting Standard.
  2. Due diligence process for the accounts mentioned above might be simplified by newly described exceptions.
  3. Definition of “Related Entity”: Two investment entities may be considered as a “Related Entity” if they are under common management and such management fulfils the due diligence obligation of the investment entities.

More details on the recent changes can be found under the following link: (Link-Chinese).

The Netherlands announces FATCA and CRS reporting deadlines for 2019

In November 2018, the Netherlands Ministry of Finance announced the Foreign Account Tax Compliance Act (“FATCA”) and the Common Reporting Standard (“CRS”) deadlines for the year 2019 (Link-Dutch).

Three deadlines are set out as follows:

  • 1 February 2019 for Financial Institutions that offer loans and/or investment products subject to reporting regimes in addition to FATCA and/or CRS.
  • 1 May 2019 for Financial Institutions that offer payment products, savings products, and private home annuity savings.
  • 1 August 2019 for Financial Institutions that are subject to FATCA and/or CRS reporting regimes only.

Moreover, Financial Institutions may submit the information related to investment products, loan products, payment and savings products, private home annuity savings, FATCA and CRS before 1 February 2019.

France publishes an update on the CRS Guidance

On 7 November 2018, Tax Administration of France (“FTA”) published an update on the Common Reporting Standard (“CRS”) Guidance. In this connection, Chapter 2.5, which outlines the obligations of account holders has been added (Link-French).

This chapter is subject to public consultation from 7 November 2018 to 31 January 2019. Remarks to the administration can be submitted via email to the FTA under the following email address: bureau.cf1c@dgfip.finances.gouv.fr. (Link-French).

Bermuda updates Tax Information Reporting Portal User Guide and FAQs

On 14 November 2018, the Government of Bermuda released an updated version 4.0 of its “Tax Information Reporting Portal User Guide” (“User Guide”) (Link). The purpose of the guide is to provide an overview of the most used functionalities in the Bermuda’s Tax Information Reporting Portal with respect to Reporting Entities meeting their reporting obligations under the Organization for Economic Co-operation and Development (“OECD”) Common Reporting Standard (“CRS”) and Country-by-Country Reporting (“CbC”).

In this connection, Chapter 4.4 on submitting Nil CRS filings and Chapter 7.1 on the summary of CbC validation rules have been updated. Nil CRS filings are mandatory in Bermuda, starting with the reporting year ending on 31 December 2017. Only a single domestic Nil filing needs to be submitted, to indicate that the Reporting Entity does not have any reportable accounts for the reporting period.

Furthermore, Chapter 14 on the Reporting Entities, which no longer have reporting obligations and need to be deactivated from the portal has been added to the User Guide.

In addition, related Frequently asked Questions (“FAQ”) document has been updated to reflect the recent changes in the User Guide (Link).

IRS releases updated FAQs on QI/WP/WT

On 19 November 2018, the U.S. Internal Revenue Service (“IRS”) updated its Frequently Asked Questions (“FAQs”) on Qualified Intermediaries (“QI”), Withholding Foreign Partnerships (“WP”) and Withholding Foreign Trusts (“WT”) (Link).

Questions 5 and 6 in the section “Provisions for 2017 QI Agreement” have been updated to support users in understanding the respective requirements:

  • Question 5: In order for a QI’s QI designated accounts to remain under a Qualified Intermediary, what steps must be followed when a QI merges into an entity already operating as a non-QI?

Answer 5: First, the non-QI must apply for QI status at the time of the merger according to Section 5 of the QI Agreement via the QI/WP/WT Application and Accounts Management System, and, if the non-QI is approved for QI status effective as of the date of the merger, the original QI will merge into the newly approved QI (successor QI).  The original QI must notify the IRS that it intends to terminate its QI Agreement by delivery of a notice of termination and merger on the QI/WP/WT Application and Accounts Management System according to section 11.05 of the QI Agreement, provide all required information, and ensure the other requirements of section 11.05 are met.  The successor QI must provide the certification required by section 11.02(B) of the QI Agreement for the original QI’s compliance period prior to the merger.  In addition, the successor QI must provide to its withholding agent a Form W-8IMY representing its status as a QI with respect to the successor QI’s QI-designated accounts.

  • Question 6: What procedure must be followed when a QI in one country re-domiciles into another country after merging with a newly-formed entity, where the QI’s accounts remain with a branch in the original country of the QI’s residency?

Answer 6: At the conclusion of the QI’s re-domiciliation, the QI must report its new name, and the new address of its registered office on the QI/WP/WT Application and Accounts Management System, but does not have to re-apply for QI status.  The QI’s branch information must be updated to take into account the new branch of the QI that results from the re-domiciliation.  A QI that is an FFI or a sponsoring entity must also update its information on the FATCA Registration System (please see the FATCA Registration User Guide).  The QI does not have to submit the notice of termination or the certification described under section 11.05 or 11.02(B) of the QI Agreement, as the QI’s existing QI Agreement will be treated as remaining in effect notwithstanding the merger and re-domiciliation. However, the QI must provide to its withholding agent a Form W-8IMY revised to reflect changes resulting from the re-domiciliation that are relevant to the form.

IRS publishes updated FAQs on FATCA Registration System

On 16 November 2018, 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 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.

OECD issues updates to the Guidance for Financial Institutions on CBI/RBI schemes

On 20 November 2018, the Organization for Economic Co-operation and Development (“OECD”) issued updates on its guidance for financial institutions on Citizenship by Investment (“CBI”) and Residence by Investment (“RBI”) schemes (Link).

In this respect, as part of its efforts to maintain the integrity of the Common Reporting Standard (“CRS”), the OECD has been working closely with Panama over the last weeks to ensure that any risks created by its RBI programs are effectively addressed. Importantly, under each of these programs, Panama ensures that residence documentation provided to successful applicants is identified as issued under the relevant program.

The update states that, where residence documentation clearly identifies the program under which it was issued, only such specific residence documentation should be perceived as potentially high-risk in the context of the CRS due diligence procedures. When presented with such documentation, financial institutions may consider applying the enhanced CRS due diligence procedures in order to ensure that the documentation is not misused by account holders for the purpose of circumventing the CRS. In other cases, Panama-issued residency documentation is not by itself to be treated as being potentially high-risk from the perspective of the CRS due diligence procedures.

This guidance will be updated on an ongoing basis where other jurisdictions adopt effective mitigating measures (Link).

Monaco expands the list of Reportable and Partner Jurisdictions

On 2 November 2018, the Government Princier of Monaco published “Ministerial Order 2018-1007” (Link-French), which includes the latest update of the reportable jurisdictions list under the Common Reporting Standard (“CRS”).

The complete list of reportable jurisdictions in the year 2018 encompasses the following countries: Andorra, Austria, Belgium, Bulgaria, Cyprus, Croatia, Czech Republic, Denmark, Estonia, Finland, France, Germany, Gibraltar, Greece, Hungary, Ireland, Italy, Japan, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Mauritius, Mexico, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden and United Kingdom.

In addition, the list of reportable jurisdictions in the year 2019 contains additional 26 countries: Argentina, Australia, Azerbaijan, Brazil, Canada, Chile, China, Faroe Islands, Greenland, Guernsey, India, Indonesia, Iceland, Jersey, Malaysia, Isle of Man, New Zealand, Norway, Panama, Russia, San Marino, Saudi Arabia, Seychelles, Singapore, Switzerland and Uruguay.

Moreover, the Monaco partner jurisdictions list has also been updated and the complete list includes:Anguilla, Argentina, Australia, Barbados, British Virgin Islands, Canada, Cayman Islands, Chile, China, Faroe Islands, Guernsey, Hong Kong, India, Iceland, Jersey, New-Zealand, Norway, Panama, San Marino, Saint Kitts and Nevis, Samoa, Seychelles, Singapore, South Africa and Switzerland.

The partner jurisdictions are those with which Monaco has begun negotiations on moving to automatic exchange. A partner jurisdiction is not yet a jurisdiction with which Monaco has undertaken to exchange information. The purpose of the list of partner jurisdictions is to enable Monegasque financial institutions to apply simplified due diligence procedures when their clients are residents in these jurisdictions.

More information on the automatic exchange of information (“AEOI”) in Monaco can be found in the Frequently Asked Questions on the government’s website (Link).