Tuesday, December 16, 2014

IRS Updates List of Countries For Exchange of Bank Interest Information and Who Qualify for Auto Exchange of Information


The Internal Revenue Service added 7 additional jurisdictions to the list of those with which the U.S. has agreements for exchange of information for purposes of reporting bank interest paid to nonresident aliens.


The 7 additional jurisdictions include:

  1. Brazil,
  2. Cayman Islands,
  3. Colombia,
  4. Croatia,
  5. Curacao,
  6. Hong Kong and
  7. Mauritius.
Bring the total to 86 countries with which the U.S. has agreements for exchange of information for purposes of reporting bank interest.

The following are the countries with which the United States has in effect an income tax or other convention or bilateral agreement relating to the exchange of tax information within the meaning of section 6103(k)(4) pursuant to which the United States agrees to provide, as well as receive, information and under which the competent authority is the Secretary of the Treasury or his delegate:
  1. Antigua & Barbuda
  2. Aruba
  3. Australia
  4. Austria
  5. Azerbaijan
  6. Bangladesh
  7. Barbados
  8. Belgium
  9. Bermuda
  10. Brazil
  11. British Virgin Islands
  12. Bulgaria
  13. Canada
  14. Cayman Islands
  15. China
  16. Colombia
  17. Costa Rica
  18. Croatia
  19. Curacao
  20. Cyprus
  21. Czech Republic
  22. Denmark
  23. Dominica
  24. Dominican Republic
  25. Egypt
  26. Estonia
  27. Finland
  28. France
  29. Germany
  30. Gibraltar
  31. Greece
  32. Grenada
  33. Guernsey
  34. Guyana
  35. Honduras
  36. Hong Kong
  37. Hungary
  38. Iceland
  39. India
  40. Indonesia 
  41. Ireland
  42. Isle of Man
  43. Israel
  44. Italy
  45. Jamaica
  46. Japan
  47. Jersey
  48. Kazakhstan
  49. Korea (South)
  50. Latvia
  51. Liechtenstein
  52. Lithuania
  53. Luxembourg
  54. Malta
  55. Marshall Islands
  56. Mauritius
  57. Mexico
  58. Monaco
  59. Morocco
  60. Netherlands
  61. Netherlands island territories: Bonaire, Saba, and St. Eustatius 
  62. New Zealand
  63. Norway
  64. Pakistan
  65. Panama
  66. Peru
  67. Philippines
  68. Poland
  69. Portugal
  70. Romania
  71. Russian Federation
  72. Slovak Republic
  73. Slovenia
  74. South Africa
  75. Spain
  76. Sri Lanka
  77. St. Maarten (Dutch part)
  78. Sweden
  79. Switzerland
  80. Thailand
  81. Trinidad and Tobago
  82. Tunisia
  83. Turkey
  84. Ukraine
  85. United Kingdom
  86. Venezuela
The guidance also updates the list of jurisdictions with which automatic exchange of information is appropriate. The 2012 list consisted only of Canada. The new list contains 18 jurisdictions including:

  1. Australia 
  2. Canada  
  3. Denmark 
  4. Finland 
  5. France  
  6. Germany  
  7. Guernsey  
  8. Ireland  
  9. Isle of Man  
  10. Italy  
  11. Jersey  
  12. Malta  
  13. Mauritius 
  14. Mexico  
  15. Netherlands  
  16. Norway 
  17. Spain  
  18. United Kingdom
This guidance is effective for interest paid on or after January 1, 2015, and will be used by U.S. financial institutions making payments of deposit interest of $10 or more on deposits maintained at an office within the United States to nonresident alien individuals.

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Rev. Proc. 2014-64

1
Part III
Administrative, Procedural, and Miscellaneous
26 CFR 1.6049.00-00: Returns Relating to Payments of Interest
(Also: 1.3406.07-00 Exceptions to Backup Withholding)
Update of Rev. Proc. 2012-24, Implementation of Nonresident Alien Deposit Interest Regulations
Rev. Proc. 2014-64
SECTION 1. PURPOSE
This revenue procedure lists, in Section 3, the countries with which the United States has in effect an income tax or other convention or bilateral agreement relating to the exchange of information within the meaning of section 6103(k)(4) of the Internal Revenue Code pursuant to which the United States agrees to provide, as well as receive, information and under which the competent authority is the Secretary of the Treasury or his delegate for purposes of the reporting required of payors under §§1.6049-4(b)(5) and 1.6049-8(a) of the Income Tax Regulations.

This revenue procedure also lists, in Section 4, the countries with which the Treasury Department and the IRS have determined that it is appropriate to have an automatic exchange relationship with respect to the information collected under §§1.6049-4(b)(5) and 2
1.6049-8. This revenue procedure updates Rev. Proc. 2012-24, 2012-20 I.R.B. 913, effective for interest paid on or after January 1, 2015, by adding additional countries to the lists set forth in Sections 3 and 4.
SECTION 2. BACKGROUND
Sections 1.6049-4(b)(5) and 1.6049-8(a), as revised by TD 9584, require the reporting of certain deposit interest paid to nonresident alien individuals on or after January 1, 2013. Section 1.6049-4(b)(5) provides that in the case of interest aggregating $10 or more paid to a nonresident alien individual (as defined in section 7701(b)(1)(B)) that is reportable under §1.6049-8(a), the payor is required to make an information return on Form 1042-S for the calendar year in which the interest is paid. Interest that is reportable under §1.6049-8(a) is interest described in section 871(i)(2)(A) that relates to a deposit maintained at an office within the United States and that is paid to a resident of a country that is identified, in an applicable revenue procedure (see §601.601(d)(2)) as of December 31 prior to the calendar year in which the interest is paid, as a country with which the United States has in effect an income tax or other convention or bilateral agreement relating to the exchange of tax information within the meaning of section 6103(k)(4), under which the competent authority is the Secretary of the Treasury or his delegate and the United States agrees to provide, as well as receive, information. Rev. Proc. 2012-24 was published contemporaneously with the publication of TD 9584 to identify those countries with which the United States has in force an information exchange agreement, such that interest paid to residents of such countries must be reported by payors to the extent required under §§1.6049-8(a) and 1.6049-4(b)(5). This revenue procedure updates Rev. Proc. 2012-24 and will be 3
updated by subsequent revenue procedures as appropriate. As noted in the preamble to the regulations and Rev. Proc. 2012-24, the IRS is not required to exchange information with another country, even if an information exchange agreement is in effect, if there are concerns about confidentiality, safeguarding of data exchanged, the use of the information, or other factors that would make the exchange of information inappropriate.

SECTION 3. COUNTRIES OF RESIDENCE WITH RESPECT TO WHICH THE REPORTING REQUIREMENT APPLIES
The following are the countries with which the United States has in effect an income tax or other convention or bilateral agreement relating to the exchange of tax information within the meaning of section 6103(k)(4) pursuant to which the United States agrees to provide, as well as receive, information and under which the competent authority is the Secretary of the Treasury or his delegate:

  1. Antigua & Barbuda
  2. Aruba
  3. Australia
  4. Austria
  5. Azerbaijan
  6. Bangladesh
  7. Barbados
  8. Belgium
  9. Bermuda
  10. Brazil
  11. British Virgin Islands
  12. Bulgaria
  13. Canada
  14. Cayman Islands
  15. China
  16. Colombia
  17. Costa Rica
  18. Croatia
  19. Curacao
  20. Cyprus
  21. Czech Republic
  22. Denmark
  23. Dominica
  24. Dominican Republic
  25. Egypt
  26. Estonia
  27. Finland
  28. France
  29. Germany
  30. Gibraltar
  31. Greece
  32. Grenada
  33. Guernsey
  34. Guyana
  35. Honduras
  36. Hong Kong
  37. Hungary
  38. Iceland
  39. India
  40. Indonesia 
  41. Ireland
  42. Isle of Man
  43. Israel
  44. Italy
  45. Jamaica
  46. Japan
  47. Jersey
  48. Kazakhstan
  49. Korea (South)
  50. Latvia
  51. Liechtenstein
  52. Lithuania
  53. Luxembourg
  54. Malta
  55. Marshall Islands
  56. Mauritius
  57. Mexico
  58. Monaco
  59. Morocco
  60. Netherlands
  61. Netherlands island territories: Bonaire, Saba, and St. Eustatius 
  62. New Zealand
  63. Norway
  64. Pakistan
  65. Panama
  66. Peru
  67. Philippines
  68. Poland
  69. Portugal
  70. Romania
  71. Russian Federation
  72. Slovak Republic
  73. Slovenia
  74. South Africa
  75. Spain
  76. Sri Lanka
  77. St. Maarten (Dutch part)
  78. Sweden
  79. Switzerland
  80. Thailand
  81. Trinidad and Tobago
  82. Tunisia
  83. Turkey
  84. Ukraine
  85. United Kingdom
  86. Venezuela
SECTION 4. COUNTRIES WITH WHICH TREASURY AND THE IRS HAVE DETERMINED THAT AUTOMATIC EXCHANGE OF DEPOSIT INTEREST INFORMATION IS APPROPRIATE
The following list identifies the countries with which the automatic exchange of the information collected under §§1.6049-4(b)(5) and 1.6049-8 has been determined by the Treasury Department and the IRS to be appropriate:
Australia
Canada
Denmark
Finland
France
Germany
Guernsey
Ireland
Isle of Man
Italy
Jersey
Malta
Mauritius
Mexico
Netherlands
Norway6
Spain
United Kingdom 

SECTION 5. EFFECT ON OTHER DOCUMENTS
Revenue Procedure 2012-24, 2012-1 C.B. 913, is superseded with respect to interest paid on or after January 1, 2015.
SECTION 6. EFFECTIVE DATE
This revenue procedure is effective for interest paid on or after January 1, 2015.
SECTION 7. DRAFTING INFORMATION
The principal author of this revenue procedure is Leni C. Perkins of the Office of Associate Chief Counsel (International). For further information regarding this revenue procedure contact Ms. Perkins on (202) 317-6942 (not a toll free call).

  


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