FATCA and CRS Ireland Update – Are you Ready to Report?
The next step for all Irish entities which are classified as Financial Institutions ("FIs") for FATCA purposes is to submit a return (the "FATCA Return") to Irish Revenue setting out details of any US reportable accounts they may have maintained during the 2014 calendar year, or to confirm by way of nil return that they maintained no such accounts.
Our previous Ireland update set out the steps to be taken by Irish entities to determine whether they were within the scope of FATCA. FATCA has now been fully implemented in Ireland, with regulations passed, guidance notes issued, and a set of FATCA FAQs published. These FATCA materials are available from the Office of the Revenue Commissioners.
Irish Revenue have extended the FATCA reporting deadline for the calendar year 2014 to 31 July 2015 and Irish FIs will need to file a FATCA Return for 2014 by that date.
Each Irish FI must review their investors and account holders and determine whether they have any US reportable accounts for the year 2014 which will be reportable by 31 July 2015. Any US reportable accounts identified which were opened in 2015 will be reportable in 2016.
Accounts closed before 1 July 2014 do not have to be reported. Accounts in existence on 1 July 2014 do need to be reviewed using the due diligence procedures set out in the Guidance Notes. Accounts opened after 1 July 2014 are subject to the relevant FATCA account opening requirements.
All Irish FIs should ensure that they have appointed an appropriate person to review their account holder information and that they are in a position to file the relevant return by 31 July 2015.
Whilst other jurisdictions, such as the UK and the Cayman Islands, have confirmed that they will not require a "nil return" to be filed, Irish Revenue will require an Irish FI that does not hold reportable accounts for a reporting period to file a "nil return".
According to recent guidance issued by Irish Revenue, nil returns are to be filed via Irish Revenue's On-Line Service ("ROS") for the 2014 reporting period, in the same format as returns to be made for reportable accounts i.e. a FI will be required to upload a return in xml format. Irish Revenue have indicated that they have chosen to implement the nil return requirement for monitoring purposes.
Ability to File Returns Only Available to Certain Persons
It is important to note that the ability to file a FATCA return is linked to ROS access. Service providers that are tax compliance agents for corporation tax and investment undertaking tax will have the ability to file FATCA returns automatically on their ROS account. A tax compliance agent can check whether they currently have the capacity to file FATCA returns by logging into ROS using their agent certificate and selecting the client in question.
Large groups who have themselves undertaken registration of Irish entities through the IRS GIIN portal should consider whether they have ROS access and the technical ability to file FATCA reports, including nil reports. It is important that all Irish FIs ensure that the service providers who are performing their FATCA due diligence and reporting actually have the ability to make the FATCA filing. Our affiliate MaplesFS has the ability to submit FATCA returns for clients, where they act as tax agent for corporation tax or IUT purposes.
"Financial Institution" - Change in Definition
On 17 June 2015, Irish Revenue published eBrief No. 57/15. It provides that the categories of "Relevant Treasury Company" and "Relevant Holding Company" will no longer be classified as FIs. Updated regulations and guidance notes will be issued to reflect this. Such entities will now be considered non-financial foreign entities assuming they do not fall within any of the other four categories of FIs.
OECD Common Reporting Standard
The new OECD Common Reporting Standard ("CRS") is expected to take effect from 1 January 2016 in Ireland. While regulations will be passed later this year in Ireland, Irish Revenue have confirmed their intention to issue minimal guidance and to rely instead on the detailed commentary issued by the OECD in July 2014. CRS is far broader than FATCA and the reporting required is more extensive. It is understood that Irish Revenue expects companies and funds within the scope of FATCA to start putting in place the procedures required to meet CRS requirements even before it is legally implemented and legal advice should be taken in this regard.
Cayman Islands and BVI – FATCA
Maples and Calder have published a series of updates with regard to the application of FATCA to funds and special purpose vehicles ("SPVs") established in the Cayman Islands and BVI.
Maples and Calder
The Tax Group at Maples and Calder has a dedicated FATCA team which advises clients on compliance with the requirements of FATCA and CRS in Ireland. Several members of the Maples and Calder Tax Group in Dublin are heavily involved in the Irish investment funds and securitisation industry groups that liaise closely with Irish Revenue in relation to the implementation of FATCA and CRS and the practical issues arising from that implementation in Ireland.
Our affiliate MaplesFS has developed a suite of products to assist clients with their FATCA obligations. Those services include assisting with registrations to obtain GIINs, classification and validation of account holders FATCA status, remediation of non-compliant accounts, implementation of new on-boarding procedures and reporting.