After a delay of several years, the IRS’s online registration system for the Foreign Account Tax Compliance Act (FATCA) is now allowing foreign financial institutions to renew their reporting agreements on the holdings of US citizens, according to accountingweb.com.
Enacted by Congress in 2010 as part of the Hiring Incentives to Restore Employment (HIRE) Act, FATCA requires that foreign financial institutions and other nonfinancial foreign entities report the foreign holdings of US citizens who live abroad or be subject to a 30 percent withholding tax on certain US source payments.
FATCA also requires US citizens to report – depending on the value – their foreign financial accounts and assets.
Foreign financial institutions must renew their reporting agreements by July 31 or risk being considered to have terminated them as of Jan. 1. According to the IRS, all financial institutions should log in to the online registration system to determine the status of their agreements.
When the link is opened, users see a three-step process for verifying their agreements. The first offers a look at a monthly published list of foreign financial institutions that are registered, accepted, and issued a Global Intermediary Identification Number (GIIN) in accordance with FATCA regulations, with a link to an overview of the process.
The second step allows users to download the entire list of foreign financial institutions or search for a particular one by its legal name, GIIN, or country. This step also includes a link to a user guide for instructions.
The third step takes users directly to the search tool.
Financial institutions with questions about withholdings should visit the FATCA Information for US Financial Institutions and Entities or the FATCA Information for Foreign Financial Institutions and Entities webpages.
For guidance on reporting, the IRS recommends the International Data Exchange Service site, which serves as an electronic delivery point where financial institutions and host country tax authorities can send and exchange FATCA data with the United States.
For other questions, the IRS recommends visiting the FATCA compliance page.