Foreign Account Tax Compliance Act "FATCA" Regulations Are Finalized
On January 18, the Treasury Department issued final regulations under the Foreign Account Tax Compliance Act (FATCA). The final regulations incorporate the FATCA guidance that the Internal Revenue Service (IRS) has issued since proposed FATCA regulations were issued last February, as well as certain comments received regarding the proposed FATCA regulations.
The final regulations also provide clarification and details with respect to:
the method, timing and general content that will need to be included in an agreement that a foreign financial institution (FFI) will need to enter into with the IRS to avoid FATCA withholding;
phased-in timelines for due diligence, reporting and withholding;
rules concerning intergovernmental agreements; and
- procedures for compliance and registration by sponsors of commonly managed FFIs.
We intend to issue a client advisory discussing the FATCA final regulations.