Internal Revenue Service (IRS) published over 77,000 banks and other foreign financial institutions (FFIs) which already registered with the United States and received a global intermediary identification number (GIIN), to comply with the Foreign Account Tax Compliance Act (FATCA). FFI fails to disclose information on their US clients will result in a requirement to withhold 30% tax on payments of US-sourced income.
Necessary to obtaining a GIIN , as long as FFIs are making a good-faith effort to achieve compliance, such as completing their FATCA registration. FATCA will into force on July 1st 2014, but, with regard to its due diligence, reporting and withholding provisions, and so as to facilitate an orderly transition, the Internal Revenue Service is to refrain from rigorously enforcing many of its requirements in calendar years 2014 and 2015.
The first update posted by the IRS on July 1. The monthly posting of FFI list will contain the names of all FFIs that have completed FATCA registration with the IRS and obtained a GIIN up to 5 business days before the end of the previous month.
Refer FATCA regulations and other FATCA guidance for the rules concerning the need to identify and document account holders and payees; the need to withhold on withholdable payments (including transitional rules); and the requirement to report information to the IRS concerning accounts and payees – advised by FFI.
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