U.S.A.: FATCA : 2014 and 2015 as a transition period (Notice 2014-33)
On 2 May 2014, the U.S. Internal Revenue Service (IRS) released further guidance on the implementation of FATCA and Related Withholding Provisions via Notice 2014-33.
The Notice establishes that calendar years 2014 and 2015 will be regarded as a transition period for the purposes of the IRS enforcement and administration with respect to:
- The implementation of FATCA by withholding agents, Foreign Financial Institutions (FFIs) and other entities with Chapter 4 responsibilities; and
- Certain related due diligence and withholding provisions under Chapters 3 and 61, and section 3406, which were previously revised.
In addition, the Notice announces the intention of the U.S. Department of Treasury and the IRS to further amend the regulations to provide, among other things, that:
- A withholding agent or FFI may treat an obligation (including an account) held by an entity that is opened, executed or issued on/after 1 July 2014 and before 1 January 2015 as a pre-existing obligation for the purposes of sections 1471 and 1472 (subject to certain modifications);
- The standards of knowledge for withholding agents for accounts documented before 1 July 2014 will be modified.
Until publication of these amendments in the Regulations, provisions stated in Notice 2014-33 can be relied upon.
We continue to monitor the implementation of FATCA and will provide more information as it becomes available.
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