Foreign Account Tax Compliance Act: the Internal Revenue Service registration portal a walk through

Transcription

1 Foreign Account Tax Compliance Act: the Internal Revenue Service registration portal a walk through Cayman Finance international tax seminar 23 January 2014

2 EY disclaimers Circular 230 disclaimer Any US tax advice contained herein was not intended or written to be used, and cannot be used, for the purpose of avoiding penalties that may be imposed under the internal revenue code or applicable state or local tax law provisions. These slides are for educational purposes only and are not intended, and should not be relied upon, as accounting advice. EYGM disclaimers This presentation is intended to provide only a general outline of the subjects covered. It should neither be regarded as comprehensive nor sufficient for making decisions, nor should it be used in place of professional advice. EYGM Limited accepts no responsibility for any loss arising from any action taken or not taken by anyone using this material. This presentation is 2014 EYGM Limited. All rights reserved. No part of this document may be reproduced, transmitted or otherwise distributed in any form or by any means, electronic or mechanical, including by photocopying, facsimile transmission, recording, rekeying, or using any information storage and retrieval system, without written permission from EYGM Limited. Any reproduction, transmission or distribution of this form or any of the material herein is prohibited and is in violation of US and international law. EYGM Limited expressly disclaims any liability in connection with use of this presentation or its contents by any third party. Page 1

3 Foreign Account Tax Compliance Act registration of legal entities Page 2

4 Presentation objectives Registration process overview to give a high-level understanding of the Foreign Account Tax Compliance Act (FATCA) registration process via the Internal Revenue Service (IRS) portal Global Intermediary Identification Number (GIIN) composition to provide a summary of the GIIN Cayman FFIs Model 1 IGA considerations for registration FATCA registration timeline summary of the key dates for FATCA registration Page 3

5 Registration process overview Page 4

6 FATCA Financial Institution registration process steps Step 1 account creation Financial Institution(FI) creates FATCA account online (receive FATCA ID) Step 2 registration FI completes registration form Step 3 submission FI signs and submits registration form (FI will not submit registration until January 2014) Step 4 approval FI receives approval (receive GIIN) Page 5

7 Registration process step 1 Account creation Page 6

8 Account creation access IRS registration portal and account authorization declaration This example details a single financial institution registering via the IRS portal and assumes that the foreign entity has done internal analysis and determined its FATCA classification. 1.1 Procedure Foreign Financial Institution (FFI) legal entity registration (non-expanded affiliated group (EAG) ) 1. Access the IRS registration portal located at: 2. Check the box under Create New Account for Single, Lead, or Sponsoring Entity, and then click Create Account. Page 7

9 Account creation select FI type 3. Select the financial institution type as Single and click Next. Page 8

10 Account creation challenge questions 4. Choose two challenge questions and answers and click Next. Page 9

11 Account creation create an access code 5. Create an access code using the parameters defined on the website and click Next. Page 10

12 Account creation record the assigned FATCA ID 6. Record the FATCA ID assigned (and access code for each entity in a central location) and click Next. Page 11

13 Account creation 7. The registration process will automatically be opened once the access code and FATCA ID have been assigned. When re-entering the portal, enter the FATCA ID and access code. Note: a new access code and FATCA ID will be needed for each legal entity registration (except for EAGs). Note: all access codes and FATCA IDs should be recorded and maintained for each legal entity. 8. Click Next. Page 12

14 Account management considerations The system automatically locks the FATCA account after five unsuccessful login attempts. You can reset your FATCA ID or access code by going into the login screen and clicking Forgot FATCA ID or access code? and following the instructions. To reset your access code, you will need to enter the responses to the challenge questions. Page 13

15 Registration process step 2 registration Page 14

16 Registration summary Part 1 all registrants Part 2 lead FIs only Part 3 QI, WP or WT (FIs that have such an agreement in effect) Part 4 all registrants Page 15

17 Registration: step-by-step summary Type of FI Part Line Information to gather Description Single Lead Member Creates an account (chooses Access Code and is assigned a FATCA ID) 4 Receives FATCA ID and Temporary Access Code from their Lead FI Completes Part 1 X X X X All registrants 1 7 Completes Part 2 8 Completes Part 3 (only if renewing a QI, WP, or WT agreement) 9 Completes Part 4 (only on or after January 1, 2014) 10 Required to give Members their FATCA login information so that they may register 11 Will receive notification of approval X X X X Lead FIs only 2 12 GIINs will be assigned to the FI X X X X QI, WP GIINs or WT will be assigned to any branches 13 of the FI (FIs that have are a not limited 3 14 QI/WP/WT agreement in effect) 1 FI type (single, lead, member, or sponsoring entity) FI Sponsoring 2 The FI s legal name Entity 3 FI s country of residence for tax purposes FI s FATCA classification X in its country of Xtax residence: X (1) PFFI or reporting FI under a model 2 IGA, (2) RDCFFI or reporting FI under a model 1 IGA, (3) limited FI or (4) none of the above 5 FI s mailing address X FI s QI/WP/WT EIN, if the FI has in effect one of these agreements. Confirm whether the FI intends to 6 maintain or renew its status as a QI, WP, or WT. Confirm whether the FI maintains a branch in a jurisdiction outside of its country of tax residence, and then confirm whether the FI is a tax resident of the US or maintains a US branch (other than the US territories). X If the FI is a tax resident of the US or maintains a branch in the US (other than the US territories), the EIN of the FI or branch Each jurisdiction in which X the FI maintains X a branch, along with X whether the branch is a limited branch and whether the FI intends to maintain QI/WP/WT status for that branch (if it is covered by a QI/WP/WT agreement) X X X X Business title for the FATCA Responsible Officer (RO) for the FI, along with legal name and contact information Confirm whether the FI s RO will designate X one or more Points of Contact (POCs) and, if so, the POCs contact information. Note: Up to five POCs are allowed Provide the following for each member of the lead FI s EAG: (1) legal name, (2) country of residence for tax purposes and (3) member type Confirm whether the QI/WP/WT s legal name has changed since the effective date of its most recent QI/WP/WT agreement and, if so, the new legal business name and reason for the name change (merger, liquidation, re-branding). X X X For QI/WP/WTs, the responsible party s name, contact information, and whether or not that is the same person listed as the RO for the FI 15 The list of private arrangement intermediary (PAI) contracts that are effective, if applicable All registrants 4 N/A Electronic signature Page 16

18 Registration process summary by FI type Description Single Lead Member Creates an account (chooses access code and is assigned a FATCA ID) Receives FATCA ID and temporary access code from their lead FI FI sponsoring entity X X X Completes part 1 X X X X X Completes part 2 Completes part 3 (only if renewing a QI, WP or WT agreement) X X X X Completes part 4 (only on or after 1 January 2014) X X X X Required to give members their FATCA login information so that they may register X Will receive notification of approval X X X X GIINs will be assigned to the FI X X X X GIINs will be assigned to any branches of the FI that are not limited X X X Page 17

19 Registration screen shot with links to user guide and info on parts to be completed Page 18

20 Registration single FI 9. Starting with Legal Name of the Financial Institution, fill in all registration fields in the portal. Note: Click Save and Logout in order to complete registration at a later date 10. Once all appropriate fields (see slides 20 and 21) have been completed in the portal and the review page is visible, click Next. 11. Click the certification box, write in the RO s name and click Submit. Page 19

21 Registration Portal questions 3 9 Question 3 FIs country of residence for tax purposes (typically the entity s place of incorporation or principal place of management and control). Question 4 FIs FATCA classification in country of tax residence (this is a drop-down menu). Question 5 FIs mailing address (where any IRS correspondence can be received at). Question 6 indicate whether FI has in effect a withholding agreement with the IRS to be treated as a QI, WP or WT. Question 7 does FI maintain a branch in a jurisdiction outside its country of tax residence? Question 8 Is FI a tax resident of the US or does it maintain a branch in the US? Questions 9A, 9B, 9C details of jurisdictions (other than US) where FI maintains a branch. Page 20

22 Registration Portal questions and review section Question 10 Provide information about the FATCA RO for the FI. Question 11A Responsible Officer (RO) designation of points of contact for the FI. Up to five POCs can be listed. Question 11B POC information section, and POC authorization section for RO to check and authorize through entering RO s name in the text field. Edit/review of registration part 1 can be done at this point. The system will take lead FIs to part 2, with QI/WP/WTs being taken to part 3. Single, members and sponsoring entities who are not QI/WP/WT will be taken to registration part 4. Page 21

23 Lead FI of EAG summary of account creation and registration 1. Access the IRS registration portal located at : 2. Check the box under Create New Account for Single, Lead, or Sponsoring Entity, and then click Create Account. Page 22

24 Lead FI of EAG summary of account creation and registration 3. Select the financial institution type as Lead of an Expanded Affiliated Group and click next 4. Follow steps 4-10 in slides 9-12 & 19 previously. 5. Click next and identify members of the EAG. 6. Click Next. 7. Click the certification box, write in the RO s name and click Submit Page 23

25 EAG registration for member entity summary of access and registration 1. Access the IRS registration portal located at: 2. Use the FATCA ID and access code provided by the lead FFI to log in. 3. Follow steps 9-11 in slide 19 previously. Page 24

26 Registration process step 3 submission Page 25

27 Submission Submission is done in part 4 of the IRS registration portal The individual signing the registration form on behalf of the FI should fill in the blank line with his or her name and check the box. The RO will not be able to submit the completed registration form on behalf of the financial institution until on or after 1 January 2014; although information can be entered in the FI s account before then. For the period from the opening of the FATCA Registration website through 31 December 2013, an FI was able to access its online account to modify or add registration info. Prior to 1 January 2014, any information entered, even if submitted as final, was not be regarded as a final submission but merely stored until submitted as final on or after 1 January Page 26

28 Submission Only the RO, and not the POCs, will receive notifications regarding the FI s account status. After the FI registrant submits its registration you may view and print the agreement for your records. To do this click on the Agreement Print/View option on the FATCA home page, and a window will open with a pdf file. An FI may view and edit its registration at any time. After January 2014, this will require the FI to resubmit its registration. The FI may delete its registration before the registration has been approved. After a registration is approved, the FI will have an option to cancel the agreement. Page 27

29 Registration process step 4 Approval and the GIIN Page 28

30 Approval and the GIIN As registrations are finalized and approved in 2014, registering FIs will receive a notice of registration acceptance and will be issued a GIIN. The IRS will electronically post the first IRS FFI List by 2 June 2014 and will update on a monthly basis thereafter. To ensure inclusion on the June 2014 IRS FFI List, an FI will need to finalize its registration by 25 April Page 29

31 The GIIN Page 30

32 FATCA Global Intermediary Identification Number ( GIIN ) contents Background: an FFI will use its GIIN to establish its chapter 4 status for withholding purposes and to identify the institution for reporting purposes under the final regulations. The GIIN will be made of 19 characters (including 3 periods) and consist of alpha and numeric values. 2M8DQ FI Alpha/Numeric 5 Numeric/Alpha 2 Alpha 3 Num FATCA ID for a single FI, lead FI, or sponsoring entity. For member FIs, the 6 characters of the lead FI s FATCA ID ISO country code of the FI or branch Last 5 characters of a member FI s FATCA ID. Assigned sequentially to each member as they are entered into the system (e.g., third member entered will be 00003). Lead FIs and sponsoring entities will be 00000; Single FIs will be Identifies the FI type (e.g., lead, single, member, or sponsoring entity) or branch status Page 31

33 Cayman FFIs model 1 IGA considerations Page 32

34 Reporting FIs under Model 1 or 2 IGA Reporting FIs under a Model 1 IGA: most reporting FIs under a Model 1 IGA are registering only to obtain a GIIN and to authorize one or more POCs to receive information related to FATCA registration on behalf of the FI. Reporting FIs under a Model 2 IGA: most reporting FIs under a Model 2 IGA are registering only to obtain a GIIN, authorize one or more POCs to receive information related to FATCA registration on behalf of the FI, and to confirm that they will comply with the terms of an FFI agreement as modified by the applicable model 2 IGA. Page 33

35 Special rules for registration for FIs under a Model 1 IGA FIs that are treated as reporting FIs under a Model 1 IGA should register as Registered Deemed Compliant Foreign Financial Institutions (RDCFFIs). A reporting FI under a Model 1 IGA will be able to register and obtain a GIIN prior to 1 July 2014 and may generally find it convenient to do so. Nonetheless, such an FI is not required to provide a GIIN to withholding agents prior to 1 January 2015 and therefore has time beyond 1 July 2014 to register and obtain a GIIN. In addition, a reporting FI under a Model 1 IGA must register prior to 1 July 2014 (1) if it maintains one or more branches (other than a Limited Branch or US branch) in jurisdiction(s) that are not covered by a Model 1 IGA; (2) if it is renewing its QI, WP or WT Agreement; or (3) if it intends to be a Lead FI for one or more Member FIs that are not established in, and operating exclusively in, other Model 1 IGA jurisdictions. Page 34

36 FATCA registration timeline Page 35

37 Key FATCA registration dates FFI registration Date opened 19 August 2013 FATCA registration can be submitted as early as 1 January 2014 Global intermediary identification numbers assigned None will be issued in 2013 not needed for payments made before 1 January 2015 for model 1 FFI Last date to register with the IRS to ensure inclusion on June 2014 FFI listing/first FFI list 25 April 2014 Electronic posting of FFI list 2 June 2014 Updating of FFI list Monthly Page 36

38 Thank you Page 37

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