FATCA update from Bloomberg BNA:
Monday, January 14, 2013
from Daily Tax Report
Final rules on implementing the Foreign Account Tax Compliance Act could be issued by IRS as soon as this week, tax practitioners close to the regulators tell BNA. Enacted in 2010 as a means to stop tax evasion, FATCA requires foreign financial institutions to tell IRS about their U.S.-owned accounts. Banks that do not comply could be responsible for paying a 30 percent withholding tax on the accounts.
I would hope that as soon as this text is out, we can all set to work analysing what it means. We should react immediately as once this Policy is out, we will probably have limited time to react.
Does anyone have any information about proposed IGA Model IIs text for countries that have not yet formally signed? In the case of Switzerland, the IGA has been “initialed” but not yet approved by Parliament (this could happen during the March parliamentary session).
The Swiss Federal press releases above discuss the content of the IGAs and suggest that account closure for Swiss résidents may not be a huge risk, but until we have the text, we are in the dark. The text is secret, much like the final arrangement with UBS was up until November 2009.
That is what the KPMG source on Linkedin said too, so we shall see.
@Jefferson D. Tomas
I just posted a comparison of the models here.
Here is the text of the Model II for Switzerland from a KPMG site.
BTW, notice this Michael Schneebeli runs a Group on Linked in. He does not like contrarian comments, and does not let them out of moderation. I have been saving a little beauty I wrote just to tweak him knowing it would never see the light of day…
He was the one that said the Final Regs would be out this week.
I posted a comment, just for the fun of it.
BTW, credit to @Tim who was the origin of most of this list. He is a good and generous material source. Thanks Tim.
Correct me if I am wrong, but “Final Regulations, I believe, mean just that. They are no longer open for discussion once they are issued. If they are bac then the effort has to be redirected to getting them revoked. Does not that become the only hope once they have been published?
Final FATCA Regulations must provide clarity
Yvonne Kunihira-Davidson, a London-based tax reporting and withholding specialist at law firm Burt, Staples & Maner, hopes the final regulations will detail how the US Internal Revenue Service (IRS) actually intends to administer Fatca. “There are a lot of administration issues. The understanding around how the US is going to administer Fatca is unclear. It’s unknown. It’s not understood even by the UK’s HM Revenue & Customs,” she says.
The industry is awash with rumours that final Fatca regulations will be released this week, with some saying they are expected today.
“The final regulations are due to be released soon and we understood that the soon could be as early as this week as opposed to later in January,” says one industry source. “The IRS is said to have been having a discussion on edits to the final regulations as late as last week, so it’s a question mark. It would be nice if they came out today or in the next couple of days, but there is a high chance that they’ll come out this week,” the source adds.
Here’s hoping that the “final” regulations will be just as confusing and undecipherable as the draft ones were. I think the odds of that are pretty good, given the US’ absolute refusal to back down on much of anything these days.
If they produce another set of impossible regulations, it’s far more likely that the world (and in particular Canada) will balk at compliance. And I wonder how they’ll deal with the current Jan. 1 2014 implementation date. Not much news circulating about more IGAs these days.
Not much news on IGAs at all. I am wondering if more and more are carefully reading section 6 on Reciprocity and realizing it doesn’t get them much.
I’m not sure this FATCA timeline by Ernst & Young is comprehensive but it does give an overview of what happened when and what is expected to happen when …
And this page seems to be tracking the latest “FATCA Alerts” …
Always keep in mind that Ernst & Young is part of the “compliance industry”.
My banking source just sent me a note saying that US Treasury and Finance Canada are still talking, but an IGA is not imminent. My guess is that these final rules, once they’ve been analyzed here, will determine whether or not there’s still any momentum for an IGA.
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Your words are like Valium to me.
And they’re free! I’m glad they offer solace; I sure hope they’re not wrong.
Rumor was good!
From Reuters’ article dated July 8, 2013: “Compliance deadlines loom for U.S. global tax evasion law”:
“The Internal Revenue Service still has not finalized sign-up instructions for the new online portal, due to open by July 15 in one of the last steps toward implementing the Foreign Account Tax Compliance Act (FATCA) of 2010.”