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Law implementing Belgian FATCA-IGA

On 23 April 2014, the Kingdom of Belgium and the United States of America signed an Intergovernmental Agreement to implement FATCA in Belgium

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On 23 April 2014, the Kingdom of Belgium and the United States of America signed an Intergovernmental Agreement to implement FATCA in Belgium (“Agreement between the Government of the Kingdom of Belgium and the Government of the United States of America (US) to Improve International Tax Compliance and to Implement FATCA” (IGA)). The IGA however, has no direct effect and had to be implemented into the Belgian legal order.
This now finally happened with the Law of 13 November 2015 (FATCA Law) that will probably be published in the Belgian Official Gazette (BOG) before the end of this year.


The long awaited publication will give green light on FATCA-reporting to the Belgian tax authorities for which the deadline was originally set at 30 July 2015. However, in absence of the FATCA law, this deadline was not achieved. With the law, Belgian Financial Institutions (FIs) will need to report the 2014 FATCA information to the Belgian Tax Authorities ten days following the publication into the BOG e.g. by 10 January 2016 if published in the BOG of 31 December 2015. On the FATCA portal of the Belgian tax authorities, it is stated that the 10 day-period will be interpreted in a flexible way, meaning that in practice, FIs will have 1 month as from publication to report the 2014 FATCA information to the Belgian tax authorities.


Correspondingly, the initial deadline for the Belgian tax authorities to report to the IRS has moved from 30 September 2015 to 30 September 2016.


FATCA requires FIs outside the US to pass information about their US customers to the US tax authorities, the Internal Revenue Service (IRS). A 30% US withholding tax is imposed on the US source income of any FI that fails to comply with this requirement. Noncompliance also triggers administrative fines under local law.


FIs who need to report to the Belgian tax authorities should use CSAM and the e-Gov applications to mandate an individual to file their FATCA return on their behalf. This individual can be someone from within the FI as well as an outside advisor.

 

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