🗊Презентация Citi TTS seminar FATCA3

Citi TTS Seminar FATCA

This presentation does not constitute tax advice. It is for information purposes only. This presentation does not constitute tax advice. It is for information purposes only.

The term “foreign financial institution” includes investment entities and certain holding companies as well as traditional financial institutions The term “foreign financial institution” includes investment entities and certain holding companies as well as traditional financial institutions Any non-U.S. entity that falls into one of the following categories: Depositary banks Custodial banks or brokerage firms Insurance companies that issue policies having cash value or annuities Investment Entities, including Entities that conduct the following activities as a business on behalf of customers Trading in financial assets Portfolio management Investing, administering, or managing money or financial assets Collective investment vehicles, mutual funds, hedge funds, and private equity funds Holding company or treasury center that Is part of an expanded affiliated group (EAG) that includes another FFI Is formed in connection with or availed of by certain investment entities

FFIs are required to register as Participating FFIs, Registered deemed-compliant FFIs or Limited FFIs FFIs are required to register as Participating FFIs, Registered deemed-compliant FFIs or Limited FFIs Every FFI that is a member of an expanded affiliated group (EAG) must register with the IRS, unless an exception applies A Limited FFI is an NPFFI that is a member of an EAG and is subject to FATCA withholding Once an FFI has registered, the IRS will approve its registration and issue a GIIN (Global Intermediary Identification Number) to each Participating FFI and Registered deemed compliant FFI. The IRS registration web site will be primary means for FFIs to complete and maintain their FATCA registrations, renew QI agreements and make periodic compliance certifications. The web site will be used for ongoing electronic communication between the IRS and FFIs A GIIN will be used as an identifying number in satisfying the FFI’s reporting obligations and identifying its status to a withholding agent. The IRS will electronically post the first IRS list of Participating FFIs and registered deemed compliant FFIs (including Model 1 FFIs) on June 2, 2014, and will update the list on a monthly basis.

Unless documentation sufficient to determine the FATCA status of the payee or account holder is provided to the withholding agent, an entity will be presumed to be an NPFFI and subject to FATCA withholding Unless documentation sufficient to determine the FATCA status of the payee or account holder is provided to the withholding agent, an entity will be presumed to be an NPFFI and subject to FATCA withholding Applies to new accounts opened or obligations entered into after 12/31/2014 This presumption is rebutted by providing documentation sufficient to establish that the payee or account holder is FATCA compliant Key Differences between FATCA and prior law: FATCA requires increased due diligence on the claims made A withholding agent must treat the claim as invalid, if any information contained in the account opening file or other client files “conflicts” with the payee’s claimed FATCA status This includes a review of information or documentation collected in the performance of due diligence under Anti-money laundering (“AML”) and Know-your-customer (“KYC”) rules. A claim of foreign status will be treated as unreliable if there are certain types of “U.S. indicia” present, unless additional documentation sufficient to “cure” the U.S. indicia is obtained. This means that clients having U.S. indicia will be required to provide additional documentation to substantiate a claim of foreign status.

FIs need to determine whether to treat: FIs need to determine whether to treat: An individual account holder as a U.S. person or a foreign person An entity account holder as: a U.S. person A foreign financial institution (FFI) An exempt foreign organization (e.g., a foreign government) or A non-financial foreign entity (NFFE) An FFI as: A participating FFI A deemed-compliant FFI An exempt beneficial owner, or Non-participating FFI An NFFE as: An excepted NFFE or A passive NFFE (having a substantial US owner) Presents a new and completely different way to categorize client accounts and service providers

A Specified U.S. person is any U.S. person OTHER THAN: A Specified U.S. person is any U.S. person OTHER THAN: A publicly traded corporation or member of its expanded affiliated group; Organization exempt from tax under Section 501(a) or an individual retirement plan; The U.S., the District of Columbia, any state, any U.S. territory, any political subdivision the foregoing, or any wholly-owned agency or instrumentality thereof; Banks; REITS; RICs, Common trust fund or trust exempt from tax; A U.S. registered dealer in securities, commodities or derivatives; or A broker. Above list is similar to list of “exempt recipients” used to identify persons exempt from Form 1099 reporting, except that certain private corporations are specified U.S. persons

What Your Financial Institution Will Ask you What Your Financial Institution Will Ask you What is your FATCA status? A multi-national corporation must determine the FATCA status for each entity in its expanded affiliated group. Establish FATCA status by providing appropriate documentation: U.S. Legal Entities – Form W-9 Non-U.S. Legal Entities – Form W-8 Request for additional documentation if US indicia are present Failure to provide appropriate documentation will result in 30% FATCA withholding and reporting You are obligated to inform your bank of any change in circumstances that affects your FATCA status within 30 days of the change. Impact on Transactional Documentation May need to update Legal Documents.

An IGA establishes a partnership between the US and a foreign country An IGA establishes a partnership between the US and a foreign country To improve international tax compliance To establish uniform reporting standards and an automatic information exchange To eliminate local legal obstacles to FATCA compliance, and To implement FATCA in a manner that will reduce compliance burdens and costs . IGAs modify the FATCA compliance obligations of financial institutions located in the IGA country from that otherwise required by the U.S. Treasury Regulations There are two primary types of IGAs: Model 1 and Model 2 Both models suspend the requirement to withhold on or close recalcitrant accounts, provided that the information reporting requirements are met Under Model 1, FATCA information returns are to be filed with local tax authorities while under Model 2, these returns are to be filed directly with the IRS Allow reliance on self-certifications (IRS form or similar agreed upon form)

FATCA imposes obligations on FFIs that may be in conflict with the laws of the jurisdiction in which an FFI operates, including FATCA imposes obligations on FFIs that may be in conflict with the laws of the jurisdiction in which an FFI operates, including Privacy laws prohibiting the sharing of personal information on clients, including sharing with a foreign tax authority Access-to-banking laws that guarantee that an account must be opened or that accounts may not be closed unilaterally Laws prohibiting the withholding of taxes for a foreign government or withholding without clients’ consent The IGAs present an opportunity for a country to support its FFIs compliance with FATCA by Changing local laws to remove legal obstacles to FATCA compliance Accepting the U.S. offer in the IGAs to modify or eliminate certain FFIs obligations that would apply under the Final FATCA Regulations

As of May 19, 2014, 32 countries have signed an IGA As of May 19, 2014, 32 countries have signed an IGA 27 are Model 1 IGAs 5 are Model 2 IGAs Model 1 bilateral agreement published in July 2012 and Model II published in November 2012. 33 additional countries have reached an agreement in substance 31 are Model 1 IGAs and 2 are Model 2 IGAs On April 2, 2014, Treasury and IRS announced that it would treat IGAs as in effect in countries that have reached an agreement in substance on the terms of an IGA Provides FFIs in those countries with clarity on their FATCA status when they register with the IRS and what they need to do to implement FATCA Until the country specific IGA is signed, the terms of the model agreement apply A country will be removed from this list if the IGA is not signed by 12/31/2014 Updates to the lists of IGAs in effect are posted to the Treasury web site periodically at http://www.treasury.gov/resource-center/tax-policy/treaties/Pages/FATCA-Archive.aspx The text of the model agreements can be found at: http://www.treasury.gov/resource-center/tax-policy/treaties/Pages/FATCA.aspx

Report U.S. account holders who are: Report U.S. account holders who are: Specified U.S. persons, Non-U.S. entities having at least 1 controlling person that is a specified U.S. person A specified U.S. person is generally means any U.S. person other than an exempt recipient (but includes a privately held corporation that is not a related entity) Reportable information Name, address and TIN of each specified U.S. person Name, address and TIN (if any) of a non-US entity with at controlling specified U.S. person Account number Account balance or value at year end or account closing date Total gross interest, dividends, other income, gross proceeds from sale or redemption of property paid or credited to the account Form 8966 will be used by FFIs in reporting on U.S. accounts, unless an election is made to report on Form 1099 FATCA Partners in Model 2 countries must report annually the “aggregate” information required respecting U.S. accounts that do not consent to reporting

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