Sighs of relief as US Treasury revises FATCA timetable
26 October 2012
News, Asia, USA
By Asia Asset Management
The US Treasury and Internal Revenue Service issued on October 24 revised timelines for withholding agents and financial institutions to complete due diligence and other requirements under the Foreign Account Tax Compliance Act (FATCA).
“This announcement provides more time for financial institutions to prepare for FATCA,” according to Richard Weisman, US tax partner based in the Hong Kong office of Baker & McKenzie, “which will be very welcome by financial institutions worldwide.” According to him, “the announcement also provides additional guidance regarding withholding tax obligations and the status of certain financial instruments that are grandfathered obligations under FATCA.”
Financial institutions internationally have been under extreme pressure as final regulations under FATCA have not yet been issued, yet a number of key dates for implementation have been scheduled to come into effect in calendar year 2013. Final regulations under FATCA were originally anticipated to be released during the summer of 2012, but have not yet been released, and are now anticipated to be released in November or December of 2012.
The new timeline provides that withholding agents generally will be required to implement new account opening procedures by January 1, 2014.
According to Mr. Weisman: “I and many other advocates on behalf of the international financial services community had requested delays in the effective dates for FATCA, and this news will be met with relief by thousands of institutions that have been concerned about the ability to comply with FATCA in light of the extensive compliance obligations, issues raised under local law, and the lack of final regulations to provide guidance.”
He added: “Attention will now shift to the specific provisions of the final regulations, and policy decisions by countries internationally as to whether they will enter into ‘Intergovernmental Agreements’ with the US related to FATCA implementation.”
More News >
Discuss: Sighs of relief as US Treasury revises FATCA timetable