Daily Tax Update - July 12, 2013: IRS Issues Guidance Revising FATCA Deadlines

IRS Issues Guidance Revising FATCA Deadlines:  Today, the IRS issued Notice 2013-43, which revises certain timelines relevant to withholding, reporting, and due diligence under sections 1471 through 1474 (commonly referred to as the “Foreign Account Tax Compliance Act” or “FATCA” provisions).  Significantly, the notice provides that withholding agents will be required to begin withholding on withholdable payments made after June 30, 2014, rather than December 31, 2013 as provided in the final regulations released in January 2013.  (The effective dates for special types of withholdable payments, i.e., gross proceeds, “passthru payments,” and certain payments with respect to offshore obligations by persons not acting in an intermediary capacity have not been changed.)  This extension provides withholding agents with a much-needed additional six months to put into place their FATCA compliance programs.  The notice also revises certain other effective dates, including the date by which withholding agents are required to implement new account opening procedures (now generally July 1, 2014), the effective date of FFI Agreements for participating foreign financial institutions (PFFIs) that register and receive a global intermediary identification number (GIIN) from the IRS on or before June 30, 2014 (now June 30, 2014), and the due date of a PFFI’s first report with respect to U.S. accounts (now March 31, 2015). 

Notice 2013-43 also modifies certain key due dates relevant to FATCA registration for foreign financial institutions (FFIs).  The FATCA registration website is now projected to be accessible on August 19, 2013.  However, any submissions made prior to January 1, 2014 will not be regarded as final until January 1, 2014.  In addition, the IRS will not issue GIINs until 2014, and the IRS will electronically post the first IRS FI list by June 2, 2014.

The notice also states that jurisdictions that have signed, but not yet brought into force, an IGA will be treated as having an intergovernmental agreement (IGA) in effect if the jurisdiction is listed on a Treasury website as having an IGA in effect.  This provides important relief to FFIs that are organized in countries that have signed an IGA but face uncertainty as to whether their country will be able to enact implementing legislation before FATCA becomes effective.