In addition to the updated Guidance Notes on the Implementation of the Foreign Account Tax Compliance Act (“FATCA”) on 9 December 2019 (Link-Blog), Irish Tax and Customs, on 12 December 2019, released Revenue eBrief No. 213/19. This eBrief contains an update to the Filing Guidelines for FATCA and the Filing Guidelines for DAC2-Common Reporting Standard (“CRS”) (Link). For FATCA, the Tax and Duty Manual Part 38-03-25 (Link) has been updated to include the following:
- Update on Account Holder TIN XML schema element
- Clarification on valid ROS characters
- Details of FATCA XML forbidden and restricted characters
For CRS, the Tax and Duty Manual Part 38-03-26 (Link) has been updated to include the following:
- Clarification on valid ROS characters
In addition, on 18 December 2019, Irish Tax and Customs released an update of Revenue Guide to Automatic Exchange of Information (AEOI) for Financial Account Holders. Tax and Duty Manual Part 38-03-24 has been updated by the addition of paragraph 17, containing a summary of new “Relief Procedures for Certain Former Citizens” recently announced by the U.S. Internal Revenue Service (“IRS”).
While every effort is made by Irish Tax and Customs to ensure that the information given in these guidelines is accurate, it is not a legal document. Responsibility cannot be accepted for any liability incurred or loss suffered as a result of reliance on any matter published.
On 9 November 2019, before Oman’s addition to the OECD Common Reporting Standard (“CRS”) Multilateral Competent Authority Agreement signatories list (Link-Blog), PwC Middle East released the Tax Insights: Oman: Capital Market Authority (“CMA”) announces the Common Reporting Standard (“CRS”) inspection and audit of financial institutions by the Secretariat General of Taxation of the Ministry of Finance (Link). The Capital Market Authority is the government entity which is supervising the operations of the capital markets and insurance sector in Oman. The Sultanate of Oman is one of the first jurisdictions in the Middle East region to begin audit and inspection processes for Financial Institutions under the CRS and could signify the beginning of other Middle East jurisdictions signed up to the CRS to also begin implementing similar processes to assess the level of compliance of Financial Institutions. The first exchange of information is expected to happen in 2020. The PwC report points out that it is critical that Omani Financial Institutions implement the CRS requirements and ensure they are onboarding new account holders in a CRS compliant manner.
In addition, on 17 December, the Capital Market Authority held a workshop on the lessons learnt from compliance with CRS and other exchange of information processes (Link). One of the workshop’s focus areas included the differences and similarities between the Foreign Account Tax Compliance Act (“FATCA”) and CRS.
During the months of September and October 2019, the National Tax Authority in Japan (“NTA”) collected financial information on over 1,8 million foreign accounts under the Common Reporting Standard (“CRS”) (Link-Blog), which is an increase to volume collected last year of over 1,3 million accounts (Link-Japanese).
Such financial information was reported from 85 different countries worldwide. Furthermore, Japan provided financial information on 470,000 accounts to 64 countries, also under the CRS.
Last year’s expectation, to increase the volume of the exchanged information under CRS have been surpassed. Due to the significant increase of public interest on international tax avoidance cases, which include hiding assets overseas by the affluent class and corporations that conduct cross-border transactions and reducing tax burden using the mismatch in the tax systems and/or treaties among jurisdictions, the topic of international exchange of tax information was also introduced in Japan’s 2019 National Tax Agency Report (Link).
On 18 November 2019, Tax Administration of Finland published a revised version of the Electronic Notification Overview Guide for the Foreign Account Tax Compliance Act (“FATCA”) and the Common Reporting Standard (“CRS”) (Link-Finnish). Chapter 4.1 on the structure of the list of data has been updated. The list of data has six different columns: ID, Position, P / V, T (unnatural), L (Position) / T (Archive), Description, Format, and Allowed Values. A table with an explanation of the respective columns is inserted in the document.
On 3 December 2019, U.S. Internal Revenue Service (“IRS”) updated its Frequently Asked Questions (“FAQs”) IDES Technical (Link). Question A16 in the section “General Questions” has been updated to support users in understanding the respective requirements:
Question A16: What XML Schema version for FATCA Reporting (Form 8966) is currently in use?
Answer A16: IDES only accepts FATCA XML Schema v2.0 files, as of January 2017, and files submitted using other than version 2.0 of the schema will generate error notifications. More information is available on the FATCA XML Schemas and Business Rules for Form 8966 page.
The IRS will conduct open user testing for all FATCA filers biannually. User participation in IDES open testing is voluntary. In order to participate in testing, filers need to have an active password. All passwords and profile information should be updated BEFORE the enrollment cutoff. Users should also verify that the digital certificate uploaded to IDES for their organization is valid. All testing sessions will be announced on the IDES Testing Schedule page.
On 4 December 2019, PwC’s CITT Compare Tool was updated to include the latest content from Mauritius and Ukraine. Please take this opportunity to re-run reports for those countries and use the latest information within your projects.
On 21 August 2019, the Swedish Tax Agency released a Newsletter summarizing the latest Automatic Exchange of Information (“AEOI”) events in Sweden.
Regarding the Common Reporting Standard (“CRS”) the newsletter, which is only available in Swedish, reminds Financial Institutions of the following common reporting mistakes:
- Financial institutions which only reported residence in Sweden (ResCountryCode SE) are reminded, that Swedish residence should not normally be reported in accordance with CRS, except for undocumented accounts.
- A large number of incorrect foreign TINs and Swedish TINs, tagged as foreign, have been reported
- If the account is residence in Sweden should always be stated
- First name and last name are a mandatory task and must be reported separately
- Account holders with US residence have been reported in CRS reporting
- The number of undocumented accounts is significant for the Swedish Tax Agency examination of whether an institution fulfills its obligations
- There is a difference between what is mandatory by law and what is not mandatory according to the XML schema. The fact, that a reporting obligation is not mandatory by the XML schema does not mean that the task should not be included in the report.
Regarding the Foreign Account Tax Compliance Act (“FATCA”) the newsletter states that the Swedish Tax Agency complies with the U.S. Internal Revenue Service (“IRS”) approach for handling missing US TIN set out in the current IRS FATCA FAQ.
Changes in 2020 with regard to CRS and FATCA are:
- Relevant certificates must be obtained before a new account is opened
- The exception for accounts held by the estate shall be limited to and with the fourth calendar year after the calendar year when the death occurred
- Exemptions for escrow accounts are removed
Changes in 2020 with regard to CRS are:
- For undocumented accounts, a balance or value must be provided at the end of the year.
- Several exemptions from reporting obligation will be removed
In addition, information on lex Asea values will be issued at the end of January 2020, and a draft of technical descriptions for the 2019 income year is due in January.
Please note that the above information has been received through an email subscription. To receive the latest news regarding AEOI in Sweden, feel free to send a request to the following email address: firstname.lastname@example.org
On 11 December 2019, the text of the Competent Authority Agreement on Automatic Exchange of Information (“AEOI”) between Anguilla and the Isle of Man was released (Link). This agreement, signed on 3 December and 11 December 2019, forms the basis of the exchange of information between these nations under the Common Reporting Standard.
On 17 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:
- Reporting Portal – User Guide 3.4
- Reporting Portal – FAQs 4.5
Frequently Asked Questions (“FAQ”) for e-Proceeding have been added to chapter 8 in both documents.
On 10 December 2019, the Swiss Parliament announced that Switzerland is able to introduce the Automatic Exchange of Information in tax matters with further 18 countries (Link-German). The Swiss Council of States approved 18 of 19 federal decrees. The states are Albania, Azerbaijan, Brunei, Dominica, Ghana, Kazakhstan, Lebanon, Macao, the Maldives, Nigeria, Niue, Pakistan, Peru, Samoa, Sint Maarten, Trinidad and Tobago, Vanuatu and Oman.
The agreement for the data exchange with Turkey has been suspended. Already in October, the Swiss Commission for Economic Affairs and Taxation suspended business with Turkey due to the Turkish military intervention in Syria. The Federal Council had strongly condemned this intervention.
Switzerland plans to introduce the AIA with the 18 countries from 2020. A first data exchange is planned for 2021.
In addition, on 13 December 2019, the Swiss Federal Council adopted a new Ordinance to the Financial Market Supervision Act (“FINMASA”). The ordinance specifies the tasks of the Swiss Financial Market Supervisory Authority (“FINMA”) at the international level (Link).