By Lydia Beyoud
The deadline for withholding and reporting requirements under the Foreign Account Tax Compliance Act has been delayed by six months until July 1, 2014, the Treasury Department announced in new guidance issued July 12.
The delay is a result of overwhelming interest from countries to finalize their intergovernmental agreements (IGAs) with Treasury and the Internal Revenue Service, and to gain more time to put information technology systems in place necessary for the reporting before withholding penalties go into effect, a senior Treasury official said during a conference call with reporters.
Many governments, foreign financial institutions (FFIs), and withholding companies interested in or already engaged in implementing the information exchanges under FATCA realized that they would not be able to have their IT systems in place before the Jan. 1 deadline, the official said.
“Given the groundswell of international interest in FATCA, we are providing an additional six months to complete agreements with countries and jurisdictions across the globe, before withholding begins,” Treasury Deputy Assistant Secretary for International Tax Affairs Robert B. Stack said in a July 12 news release that accompanied the guidance (Notice 2013-43).
Under the rules, failing to perform certain due diligence, including the disclosure of U.S.-owned offshore accounts to IRS, would have subjected foreign financial institutions to a 30 percent withholding tax. The goal of FATCA is to receive information on U.S. tax evaders, not to collect massive withholding taxes, the Treasury official said during the call.
Texts of Notice 2013-43 and the Treasury Department news release are in TaxCore.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to email@example.com.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).