FATCA Registration Begins in 6 Days…

(Image courtesy the Guardian)

…and confusion reigns!

The on-line portal for foreign financial institutions (FFI) to register for FATCA set up by the U.S Internal Revenue Service goes ‘live’ on July 15 but the sign-in instructions have still not been finalised.

Thousands of banks, insurance companies, investment funds and other FFIs with U.S. customers are required to register with the IRS by October 25 to avoid FATCA penalties due to start in less than six months.

The problem is that if the IRS does not produce guidance within a couple of weeks of  the portal’s opening this delay this will inevitably lead to a ‘scramble’ by FFIs to register before the October 25th cut-off date for registration.

Worst case fears are that the portal could become overloaded and ‘crash’ leaving FFIs unable to register through no fault of their own and exposed to the application of the U.S 30% withholding levy.

So widespread is the concern that the Securities Industry and Financial Markets Association (SIFMA), citing the fact that FATCA was delayed once before, has renewed its call that the imposition of FATCA penalties be postponed by another year to 2015.

(US President Obama with his Treasury Secretary Jack Lew. Image: Boston Globe)

Predictably the official line of the IRS is that it continues to push ahead with FATCA implementation.

The foreseeable problems with on-line registration for FATCA is just another in a series of widely publicised ‘knocks’ that this global tax compliance initiative has received in the past couple of weeks.

Of the nine FATCA implementation arrangements, referred to as intergovernmental agreements (IGA), that the US has negotiated, only Germany seems set to ratify theirs which would allow German firms to report U.S. client information via their local tax authorities rather than directly to the IRS.

In Canada, debate on a proposed IGA has raised the inevitable questions of sovereignty, access to confidential taxpayer information and the ability of the US to secure the integrity of the information they collect.

Russia has demonstrated its apathy to this extra-territorial application of U.S domestic tax evasion law commenting only that they are studying the implications and would be in a position to discuss a U.S IGA sometime in the future.

It has also been reported that Chinese government officials have so far been publicly dismissive of FATCA, throwing into question whether financial firms in Hong Kong will be able to comply with the FATCA law. According to a Hong Kong official, Hong Kong is “initiating some preliminary discussion” with U.S. officials.

U.S Senator Paul Rand introduced a bill to repeal FATCA and has suggested that contrary to the one version of the model IGA which provides for the reciprocal exchange of information between the US and its FATCA partner, legally the U.S Treasury cannot  reciprocate.

More on the lack of U.S reciprocity here.

Finally, regional and multilateral FATCA-inspired legislation is taking root in the European Union and possibly at the multilateral level using the OECD crafted Convention on the Mutual Administrative Assistance in Tax Matters. With the blacklisting of tax havens seemingly contingent on their willingness to sign on to to G20 backed multilateral FATCA, the problems with the IRS on-line registration portal may just be the beginning of the fallout from FACTA.

For more on FATCA click here.

Advertisements

16 thoughts on “FATCA Registration Begins in 6 Days…

    1. Thanks Gregg! It’s getting worse I think . Flurries of legislative activity at the national, regional and international levels with seemingly little regard for implementation, overlap or latent inconsistencies. Let’s not even get started on the inadequate unintegrated ICT. Total folly. Basic lack of customer service —no regard for the end-user. Monday should be interesting. Thanks again for the comment. Appreciate it! Fran

      Like

  1. Pesticide exposure isn’t only an immediate concern, pesticide residues can linger in your garden and home for months or even years.

    The great thing about this kind of conditioning remedy is that you still get to apply your ordinary conditioner and is
    quite inexpensive. ” Toxins can invade your body from outside sources like the metals aluminum, lead and mercury.

    Like

  2. Nice post. I learn something totally new and challenging on sites I stumbleupon on
    a daily basis. It’s always interesting to read articles
    from other writers and practice a little something from other web sites.

    Like

  3. Unquestionably imagine that which you stated. Your
    favorite reason appeared to be at the internet the easiest thing to
    remember of. I say to you, I certainly get annoyed at
    the same time as folks think about worries that they plainly do
    not know about. You controlled to hit the nail upon the highest and
    outlined out the whole thing with no need side-effects , other people could take a signal.
    Will probably be back to get more. Thank you

    Like

  4. Simply desire to ssay your article is aas astounding.
    The clearness for your submit is simply cool and i could suppose yyou are a professional on this subject.

    Fine together with your permission lett me to snatch your feed to keep
    updated with forthcoming post. Thank yoou one miullion and please carry oon thee
    rewarding work.

    Like

  5. I also share with him my concern over the content of some of the songs and its
    effect on him. The Magic of and Complete Fulfillment in Astral
    Relationships, Sex, Reproduction, Families, and the Astonishing Symptoms of Astral “Old Age”.

    Being old souls, Indigos are born knowing exactly what they want and even how to do it.

    And these spirits shall rise up against the children of men and
    against the women, because they have proceeded from them.

    He also said, “One does not become enlightened by imagining figures of light, but by making the darkness conscious.

    Like

  6. My brother recommended I might like this website. He was totally right.
    This post actually made my day. You can not imagine just how much time I had spent for this information!
    Thanks!

    Like

  7. These items have been customized by adding the personal touch of the couple.
    The officiant is several hundred feet away standing with the groom across an expanse of freshly cut
    grass that probably has been recently watered. In case a wedding will be different
    than so may the invitations.

    Like

  8. I’m not sure where you’re gtting your info, but great topic.
    I needs to spend some time learnig much mokre
    or understanding more. Thaks for fantastic information I was
    looking for this information for my mission.

    Like

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s