Foreign Account Tax Compliance Act (FATCA) - August 2019 Update
We have previously reported that MGAs would likely be considered non-financial intermediaries as they are regarded as falling into being part of the payment process of an insurance company. As a result, most MGAs had various administrative and reporting requirements under FATCA, in particular regarding providing form W-8IMY.
This has now changed. Under a proposed rule, REG-132881-17, which was published in the Federal Register on 18 December 2018, withholding on non-cash value insurance premiums is eliminated. This obviates the need to comply with administrative and reporting requirements. Although the rules are only proposed, under US law taxpayers may rely on the proposed regulations until final regulations are issued. The relaxation referred to here applies for all open tax years.
For reference, our previous notes, which are now fully superseded, are available on the links below.