Showing posts from May, 2014

FATCA and the Drive to Tax Transparency

Every day I see people coming down on FATCA. I take the view that it helps to view FATCA as part of a larger movement. It’s so much more than just the USA – even if the USA is playing a leadership role.

Consider this. BEPS (Base Erosion and Profit Shifting) now has more political-will, driving it than ever before. There are also TIEAs (Tax Information Exchange Agreements) being signed every week. The UK was the first to sign FATCA and appropriately, there is now “UK FATCA” – which sees financial institutions in Jersey, Guernsey and the Isle of Man (the Crown Dependencies) and the Overseas Territories of Anguilla, Bermuda, the British Virgin Islands, the Cayman Islands, Gibraltar, Montserrat and the Turks and Caicos Islands (the Overseas Territories) automatically providing information relating to the financial affairs of UK resident clients in respect of 2014 onwards. There is even a rumor that China is working on its own FATCA

There is also the drive for a publicly accessible regis…

FATCA & the W-8 Minefield

One of the consequences of FATCA is that financial institutions and their (overseas) clients are struggling to come to terms with evolving form requirements.

One of the main purposes of the W-8 forms is to show financial institutions (e.g. brokers and mutual fund companies) and certain other US entities, that the foreign investor / payment recipient, is not subject to the typical taxation practice where tax is withheld from payments / investment income (e.g. dividends and coupon payments).  If adequate documentation is not supplied with a W-8 form, the foreign investor will be subject to the normal rates of backup withholding.

I myself have spent far too much time on the phone trying to explain to front line staff (it's not their fault, they are just trying to understand the cryptic instructions from their line manager) the difference between the W-8s and W-9. Unfortunately, I expect the confusion to get worse before it gets better...

To Know More -
Fatca Tax singapore
USA Tax Si…

Who is a U.S. Person? Disparities between U.S. tax and immigration law


Henry P. Bubel, Jenny Longman, Lisa M. Koenig, Nikki Dryden,and Michelle Mun˜oz-Machen
Patterson Belknap Webb & Tyler LLP, Fragomen, Del Rey, Bernsen & Loewy LLP

This article is intended to provide an overview of the intersection of U.S. tax and immigration law in defining who is a U.S. person, and some of the pitfalls that result from the differing and often competing definitions under the two codes of law.
I. The increased importance of defining a U.S. Person, for tax law purposes
The question of who is a U.S. person has always been relevant for tax purposes because it determines
who is subject to (a) U.S. income, gift and estate tax, (b) filing Foreign Bank Account Reports
(FBARs), and (c) the ‘‘exit tax’’ under what is now Section 877A of the Internal Revenue Code (the
‘‘Code’’ or ‘‘I.R.C.’’).1 …

Further Guidance on the Implementation of FATCA and Related Withholding Provisions

Extract of Commentary from Deloitte -
On May 2, the U.S. Treasury and Internal Revenue Service released Notice 2014-33. Basically, the Notice provides for a so-called “soft open’, new entity accounts are given another 6 months, and Limited FFIs and branches are provided some relief. This further complicates FATCA but is certainly welcome news.

Under the Notice, relief is provided for FFIs subject to the regulations and FFIs subject to IGAs. Treasury intends to update the due diligence procedures described in Annex I of the Model 1 and Model 2 IGAs to incorporate due diligence procedures consistent with the Notice. In addition, a jurisdiction which has signed an IGA or which has reached an IGA in substance will be permitted to adopt the revised due diligence procedures pursuant to the most-favored nation provision contained within its IGA, once an IGA with the revis…