U.S.A.: FATCA: Notice 2015-66 amending regulations under Chapter 4
On 18 September 2015, the U.S. Internal Revenue Service (IRS) released Notice 2015-66 announcing their intention to amend the regulations under Chapter 4, Section 1471 to 1474, in order to extend the period of time that certain transitional rules will apply.
Specifically the amendments will extend the following:
- The date for when withholding on gross proceeds and foreign passthru payments will begin;
- The use of limited branches and limited foreign financial institutions (limited FFIs); and
- The deadline for a sponsoring entity to register its sponsored entities and redocument such entities with withholding agents.
In addition, the notice addresses the following points:
- For Model 1 IGAs not in force by 30 September 2015, the obligation for the IGA country to exchange information with the IRS is postponed until 30 September 2016.
- For Model 1 IGAs in force, a transition relief from exchanging information with the IRS by 30 September 2015 is given, provided that the Model 1 country gives notice to the IRS 30 September 2015. So, even if the information exchange does not occur by 30 September, the IGA will remain in effect.
- Relaxation of other rules pertaining to collateral and grandfathered obligations.
We continue to monitor the implementation of FATCA and will provide more information as it becomes available.
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