Today is the final day for foreign financial institutions (FFIs) registered under the Foreign Accounts Tax Compliance Act to renew their agreements under the scheme.
The Internal Revenue Service (IRS) has updated the FATCA Foreign Financial Institution (FFI) Registration system to allow for FFIs to renew their FFI agreements with the IRS. Unless an entity is exempt from these renewal requirements, it or they need to renew their agreements by close-of-play today, 31 July 2017.
Maya Buckland (pictured left), associate at the London office of US law firm and tax specialist Withers Worldwide, told International Investment: “Essentially, any entity that is a financial institution under the jurisdiction of the US Treasury Regulations or a Model 2 Intergovernmental Agreement (IGA) should already be registered with the IRS in accordance with the provisions of FACTA.
“Any institutions which are required to register under FACTA and have not yet done so need to do so as a matter of urgency, and those already registered under US Treasury Regulations or a Model 2 IGA must renew their registration agreements today — any entity that fails to do so risks losing its FFI registration status.”
Specialist check list
Her partner Penny Williams has prepared a guide for trustees of trusts, fund managers and other FFIs registered under the scheme to cross-check their responsibilities. Says Williams: “The IRS has updated the FATCA FFI Registration system to allow for FFIs to renew their FFI agreements with the IRS. Although certain FFIs are exempt from these renewal requirements, others are required to renew their agreements by 31 July 2017.
“FFIs which are required to renew their FATCA agreements include those entities that initially registered for a Global Information Identification Number (GIIN) prior to 1 January 2017 and are classified as either a Participating Financial Institution not covered by an IGA (ie, an FFI governed under the US Treasury Regulations such as a non-US trust with a US trustee) or a Reporting Financial Institution under a Model 2 IGA (eg, an FFI governed under the US-Switzerland IGA). Reporting Model 1 FFIs with operating branches outside of a Model 1 IGA jurisdiction also must renew their FATCA agreements with respect to those branches (other than related branches).
“By now, the Responsible Officer of an FFI should have received an email notification reminding the entity of the requirement to renew its FFI requirement. Entities which are required to renew their FFI agreements and fail to do so by 31 July 2017 will be removed from the FFI list, effective 1 January 2017. If renewal is required, the Responsible Officer or other designated official should log into the FFI’s FATCA Account with the appropriate FATCA ID and Access Code; a ‘Renew FFI Agreement’ will appear on the account home page. The FFI then will need to verify (or where appropriate, update) its registration information.
“Reporting Model 1 IGAs, Sponsoring entities, Direct reporting NFFEs, and Trustees of Trustee-Documented Trusts are not required to renew the FATCA agreement. These entities are not required to take any action with respect to their FFI Registration and will remain in ‘Approved Status’ on the FFI list.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.