FATCA Service Offerings

Transcription

1 FATCA Service Offerings KPMG in Malta kpmg.com.mt

2 What is FATCA? The US federal income tax system relies on voluntary compliance by taxpayers to self-report their worldwide income and compute their income tax. It is estimated that billions of dollars in taxes are evaded annually by US persons holding offshore accounts. When voluntary compliance is augmented by third-party information reporting, the IRS is able to verify taxpayer compliance. Therefore, in an effort to curb perceived tax abuse by US persons with offshore bank accounts and/or investments, the US Congress passed The Foreign Account Tax Compliance Act ( FATCA ) into law as a part of a larger legislative bill the Hire Incentives to Restore Employment Act which was signed into US law on 18 March FATCA introduces a new regulatory compliance and reporting regime which compels certain non-us entities to identify and disclose US persons with offshore financial accounts. This stated intent is achieved by imposing a punitive 30% withholding tax on withholdable payments paid, directly or indirectly, to non-us financial institutions and certain other non-us entities that fail to comply with FATCA. Malta signed an Intergovernmental Agreement ( IGA ) with the US on 16 December 2013 to improve international tax compliance and to implement FATCA. Although the introduction of the IGA eliminates the punitive 30% withholding tax, the Maltese government committed that all Malta Financial Institutions will comply with the identification and reporting requirements under the IGA.

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4 Who is affected? FATCA as implemented in Maltese law requires Malta Financial Institutions to: Register with the US Internal Revenue Services Register with the Malta Commissioner for Revenue Implement a FATCA compliance programme Identify all new and pre-existing accounts Report on Specified US Persons to the Malta Commissioner for Revenue CUSTODIAL INSTITUTIONS INVESTMENT ENTITIES Why KPMG? due dilligence requirements including: back-book customer identification and remediation and updating of client onboarding NON- FINANCIAL FOREIGN (non- US) ENTITIES DEPOSITORY INSTITUTIONS SPECIFIED INSURANCE COMPANIES KPMG has a dedicated team of FATCA experts, whose knowledge and skill set spans a variety of disciplines, working across multiple sectors with clients of all sizes to deliver FATCA solutions. Our FATCA team has extneisve experience and competence in advising and assisting with respect to FATCA compliance. This includes assisting with entity classification, registration with the US Inland Revenue Service ( IRS ) and Malta Commission for Revenue ( CIR ), procedures, reporting and any ad-hoc advice as requested. We offer tailor-made solutions to each client depending on its status in terms of FATCA. Our range of services include the following:

5 Entity Classification & Registration The first most important step to determine the scope of FATCA compliance obligations is to properly identify and classify entities as Financial Institutions or Non-Financial Foreign (non-us) Entities. KPMG can assist with the classification of all your entities / confirm the correctness of classification for FATCA purposes. KPMG can also assist with the IRS and CIR registration process, as required. Client On-Boarding FATCA has introduced extensive due diligence requirements. The requirements under FATCA will affect the due diligence requirements of an entity and on-boarding procedures. KPMG can assist with confirming that your new customer on-boarding and on-going procedures are sufficient to ensure compliance with FATCA. This may include a review of your KYC/AML procedures as well as on-boarding forms. KPMG can also assist by preparing and/or delivering tailormade training to your relevant members staff. Existing Customers Identification FATCA has introduced extensive due diligence requirements for examining the accounts of pre-existing account holders to determine whether any US indicia is found, in that identify any U.S. persons or entities that are owned by US persons. In this respect, KPMG can issue a tailor-made memo outlining the due diligence procedures necessary for the proper remediation of pre-existing accounts. KPMG can also assist by preparing and/or delivering tailor-made training to your necessary staff. Reporting Ad hoc Advice FATCA reporting for account identification in 2014 will commence in April It is a prerequisite for compliance that the entities develop processes to collect the relevant information in advance of their reporting deadline KPMG can define and confirm FATCA reporting requirements as well as consider how personnel, processes and infrastructure can be modified to deliver an output that meets FATCA reporting requirements. KPMG can also assist by providing tailor-made tools to assist with the FATCA reporting requirements. KPMG may provide any further FATCA related assistance and respond to complex queries on an ad hoc basis. This may also include training and workshops to educating front line staff as well helping senior management understand the appropriate tax and business-related areas of focus.

6 Timeline for Compliance E 1 January 2015 Treat entity accounts opened on or after this date as new accounts. B 1 July 2014 FIs to implement new on-boarding procedures Treat individual accounts opened on or after this date as new accounts F 1 January 2015 Deadline for FIs to provide upstream withholding agent with GIIN in order to avoid being withheld upon. I 30 June 2015 Complete due diligence for preexisting high-value individual accounts K 30 June 2016 Complete due diligence for pre-existing lowervalue accounts and preexisting entity accounts. L 30 April 2017 Annual reporting to IRD. For calendar year 2016, to include aggregated foreign reportable amounts paid to NPFFIs June 2014 Cut-off date for preexisting individual accounts Testing datefor account balance thresholds. A C 31 December 2014 Cut-off datefor pre-existing entity accounts Testing datefor account balance thresholds H G J 30 April 2015 Annual reporting to IRD. For calendar year January 2015 Deadline for FIs to register with the CIR. 31 April 2016 Annual reporting to IRD. For calendar year 2015, to include aggregated foreign reportable amounts paid to NPFFIs. M 30 April 2018 Annual reporting to IRD for calendar year D 30 June 2014 Deadline for FIs to register with the IRS

7 Contact us: Juanita Brockdorff Partner Tax Services Follow KPMG Malta: Lisa Zarb Mizzi Associate Director Tax Services Osar' Obayuwana Advisor Tax Services Download the KPMG Malta App: The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation KPMG, a Maltese civil partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ( KPMG International ), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International Cooperative (KPMG International). Printed in Malta