Thursday, July 19, 2012

FATCA Compliance deadline extended for QIs

The US Internal Revenue Service (IRS) is giving qualified intermediaries (QIs) an extra year to achieve compliance with the Foreign Accounts Tax Compliance Act (FATCA), which requires foreign banks to notify the assets of US taxpayers to the IRS.

Foreign banks cannot remain as QIs unless they become FATCA-compliant, and those whose QI status expires at the end of 2012 have now had their renewal date extended until the end of 2013.

Qualified Intermediaries and FATCA Implementation

Though final regulations for foreign financial institutions (FFIs) have not been issued, some basics of the administration of the Qualified Intermediary (QI) Program and FATCA implementation are known. These include the following:

1. QI's must become FATCA compliant to retain their QI status and the QI agreement will be modified to reflect the Chapter 4 requirements.

2. The renewal of the QI agreement for QI's whose renewal is expiring December 31, 2012 has been extended per Notice 2011-53 until December 31, 2013.

3. The renewal of the QI agreement will be accomplished through the online FATCA FFI registration system. This online registration system will be available no later than Jan. 1, 2013.

If you have any FATCA question, contact the Tax Lawyers at Marini & Associates, P.A. for a FREE Tax Consultation at or or Toll Free at 888-8TaxAid (888 882-9243).

1 comment:

  1. Government Unlikely to Further Extend Time Frames for FATCA Reporting, Plowgian Says

    The government is unlikely to further extend the time frames for reporting under the Foreign Account Tax Compliance Act as it works on final rules, a Treasury Department official said July 24.

    “We've done as much as we think we can in phasing in reporting requirements,” said Michael Plowgian, an attorney-adviser in Treasury's Office of International Tax Counsel. “We do have a statutory effective date to contend with.”

    Speaking at an international tax conference sponsored by the Practising Law Institute, Plowgian said final rules under FATCA likely will be out by the end of the summer or early fall. He told practitioners that a final agreement for foreign financial institutions to use to sign up for the program should be out around the same time.

    The rules and agreement are key milestones in the government's effort to implement FATCA. The law requires foreign financial institutions to report U.S.-owned accounts to the U.S. government or face, in some cases a 30 percent withholding tax.