The Treasury Department has reached an agreement with the governments of France, Germany, Italy, Spain, and the United Kingdom for designing a framework to implement the information reporting and withholding provisions by foreign financial institutions under the Foreign Account Tax Compliance Act (FATCA).
According to Treasury's news release, the governments expressed their “mutual intent to pursue a government-to-government framework for implementing FATCA—an important step toward addressing legal impediments to financial institutions' ability to comply with the regulations.”
The news release and joint statement were issued in conjunction with Internal Revenue Service proposed regulations (REG-121647-10) related to information reporting and withholding provisions by foreign financial institutions.
According to Treasury's news release, the governments expressed their “mutual intent to pursue a government-to-government framework for implementing FATCA—an important step toward addressing legal impediments to financial institutions' ability to comply with the regulations.”
The news release and joint statement were issued in conjunction with Internal Revenue Service proposed regulations (REG-121647-10) related to information reporting and withholding provisions by foreign financial institutions.
Banks in Countries With Information Sharing Pacts Still Need to Perform FATCA Due Diligence
ReplyDeletePosted March 6, 2012, 1:08 P.M. ET
Banks in countries that are working on information-sharing agreements under the Foreign Account Tax Compliance Act still must perform due diligence and identify accounts in preparation for sharing the information with their own governments, Treasury International Tax Counsel Michael Caballero said March 6.
“It isn't going to be some sort of special treatment for institutions in these countries,” Caballero said at a conference sponsored by the Institute of International Bankers. “The same due diligence drills will apply.”
The United States, France, Germany, Italy, Spain, and the United Kingdom Feb. 8 unveiled a joint statement outlining a framework for government-to-government information sharing agreements under FATCA.
On Feb. 8, the Internal Revenue Service also released proposed rules (REG-121647-10) that individual banks can use to comply with the law.
Caballero stressed at the conference that as agreements are negotiated between these and other countries, it is not anticipated that the agreements will reach down to the level of altering the requirements for banks to identify accounts and perform due diligence found in the IRS regulations.
Sharing a panel with Caballero, IRS Associate Chief Counsel (International) Steve Musher said the government plans to finalize the rules by the end of the summer, and asked for immediate comments on the guidance. He asked that taxpayers propose solutions to issues they see with the February rules.
On another FATCA issue, Caballero said the government plans to create a deemed compliant category for insurance companies when it issues the final guidance.