FATCA Update - December 2016

Although there is no new legislation, members FATCA obligations continue to expand.  The original FATCA legislation staggered the introduction of various disclosures, returns and actions.  The transitional rules applicable to Sponsored Entities change with effect from 1 January 2017 and from that date foreign passthru payments and the requirement to withhold on payments made by / to delinquent persons commenced.  Foreign to foreign payments also fall within the remit of the FATCA obligations.

In 2015, the IRS issued Notice 2015 – 66 which amongst other things, intended to delay some transitional measures.  Furthermore, the IRS website has a calendar which schedules when the various reporting requirements apply (see attached).

Having liaised with other professional and trade bodies, we recommend that members ignore any deferral dates and implement procedures to ensure that FATCA documentation is collected on all relevant transactions, including foreign to foreign and passthru transactions.  We are aware that the IRS has already commenced FATCA audits, so we recommend that the documentation is retained to evidence compliance in the event of an IRS audit or notification to withhold.