Isle of Man: US FATCA Information Exchange Put Back A Year
In a move which is likely to be of interest to those organisations who put systems and procedures in place to comply, the US has recently announced (September 2015) that information on US persons does not now need to be exchanged for certain jurisdictions until September 2016.
In Notice 2015-66 (“the Notice”), the US Treasury sets out its reasons for the postponement which are generally to allow jurisdictions which have signed inter-governmental agreements (“IGA”) more time to put systems and processes in place at government level for the exchange of information. Importantly, for Isle of Man financial institutions, which were required to provide the relevant information to the Income Tax Division by 30 June 2015, the Notice makes clear that any postponement does not impact on the deadline for provision of information to local tax authorities as such deadlines are set out in local law.
Despite a recent communication from the Internal Revenue Service in relation to the need for sponsored investment entities to register for a Global Identification Intermediary Number by the end of December 2015, the Notice also postpones the deadline for such registration. This deadline is now 31 December 2016. The ability to register a sponsored entity is currently in development and does not yet exist on the IRS’ registration portal. It would appear that the postponement may be to allow more time for the development to be concluded as the Notice makes clear that the facility to register will be available in the coming months and encourages sponsors to register as soon as there is capacity to do so.
In a separate communication, the IRS has announced that it has entered into Competent Authority Agreements (“CAA”) with Australia and the UK. A CAA underpins an IGA and provides for the mutual automatic exchange of information between the US and an IGA jurisdiction. The CAAs are the first to be entered into and in announcing them, the IRS said, “The U.S. Competent Authority expects that numerous other CAAs with additional competent authorities in IGA jurisdictions will be signed in the near future.” As the Isle of Man is one such IGA jurisdiction, we can expect that a CAA with the US will be signed in due course.
Continued developments in the area of automatic exchange of information support DQ’s view that the momentum of these initiatives continues to grow. Compliance with the various requirements is of utmost importance as we continue to demonstrate the Isle of Man’s leading position as a transparent and co-operative jurisdiction. For assistance with compliance, please contact any member of our dedicated tax information exchange team Sinead O’Connor, Tom Maher, Annemarie Hughes and Adam Killip.
