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Transitional period for FATCA enforcement

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The US Internal Revenue Service has announced a relaxation of enforcement and administration of the due diligence, reporting and withholding provisions under FATCA for calendar years 2014 and 2015 for entities which have made ‘good faith efforts to comply’ with the regulations. Calendar years 2014 and 2015 will be regarded as a transition period for participating or deemed-compliant FFIs, direct reporting NFFEs, sponsoring entities, sponsored FFIs, sponsored direct reporting NFFEs and withholding agents.

Withholding agents and FFIs will be able to treat certain entity obligations issued, opened or executed on or after 1 July 2014 and before 1 January 2015 as a pre-existing obligation. This will allow additional time, until 31 December 2014 if the payee is a prima facie FFI, or 30 June 2016 in all other cases, for the purposes of due diligence and withholding requirements. For more information, see Notice 2014-33.

Issue: 1216
Categories: News , International taxes , FATCA