Revised Implementation Timelines for FATCA
The IRS has recently revised the implementation timelines for the Foreign Account Tax Compliance Act ("FATCA").
A copy of the full text of the notice can be found here.
In relation to the key timelines, the notice confirms the following:
(a) Withholding on withholdable payments on US source income will be postponed by six months to 30 June 2014.
(b) The IRS registration portal is now scheduled to open on 19 August 2013. While FFIs can enter their information from that date, the information will not be regarded by the IRS as final and can be modified up to 31 December 2013. Registration applications will now only be accepted from 1 January 2014. The first list of compliant FFIs shall be published on 2 June 2014 and thereafter on a monthly basis. For Model 1 FFIs please see point (e) below.
(c) The IRS will also be publishing a list of jurisdictions that have signed an Intergovernmental Agreement ("IGA") and jurisdictions that have signed but not fully legislated for the IGA will be treated as having put the IGA into effect.
(d) The Cayman Islands has committed to entering into a Model 1 IGA and is continuing to finalise this agreement with a view to sign as soon as practicable. We would hope that this can be done in the coming two to three months.
(e) For payments made to Reporting Model 1 FFIs before 1 January 2015, under the current Regulations withholding agents do not need to verify that such Model 1 FFIs have a GIIN. As a result, Reporting Model 1 FFIs will have additional time beyond 1 July 2014 to register and obtain a GIIN.
We shall be issuing a more comprehensive legal guide on the major implications of FATCA affecting Cayman financial institutions once the terms of the Cayman IGA have been finalised.
For further information please speak with your usual Maples and Calder contact or one of the partners listed above.