FATCA in 2015: The Upcoming Compliance Requirements
What’s coming our with with regards to the Foreign Account Tax Compliance Act (FATCA) in 2015?
2015 sees a number of impeding developments regarding FATCA compliance as the US presses on with its quest to target tax non-compliance by U.S. taxpayers with foreign accounts.
Nick Matthews, Global Head of Forensic Services at Kinetic Partners, the global professional services firm, comments:
“Foreign Financial Institutions (FFIs) need to maintain focus on upcoming requirements, deadlines and impending developments with regards to FATCA.
“By 31 December 2014, firms that need to be compliant with FATCA or a US intergovernmental agreement (IGA) should have registered with the US Internal Revenue Service (IRS0).”
Now that we have moved into 2015, there are three key dates that firms need to be aware of:
31 March 2015 is the first FATCA reporting deadline for FFIs in non-IGA jurisdictions and FFIs in Model 2 IGA jurisdictions.
Firms will need to report the US account information to the IRS or relevant tax authorities.
It is important to note that the reporting obligations will increase in 2016 and 2017.
31 May 2015 or 30 June 2015 are typically the dates of the first FATCA reporting for FFIs in Model 1 IGA jurisdictions. Firms will need to report the US account information to the relevant tax authorities. Again, it is important to note that the reporting obligations will increase in 2016 and 2017.
30 June 2015 is when the review of pre-existing (30 June 2014) high-value individual accounts (over US$1m) must be completed.
“Understanding FATCA requirements and having a comprehensive FATCA compliance programme is essential for financial firms to limit non-compliance risk and meet obligations with relevant IGAs, the IRS and the Organisation for Economic Co-operation and Development (OECD),” says Matthews.
