AEOI Update | KPMG | IE

AEOI Update - November 2017

AEOI Update

AEOI refers to the automatic exchange, between international tax authorities, of information on Financial Accounts held by individuals, corporations, partnerships, trusts etc.

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Updated Irish Common Reporting Standard (“CRS”) FAQs

On 9 October 2017, the Irish Revenue Commissioners published an updated version of the Irish CRS FAQs. Since our previous alert on the Irish CRS FAQs in May 2017, the following key clarifications / new FAQs have been issued by the Irish Revenue Commissioners:

  • FAQ2: Previously indicated that the Wider Approach for the collection of tax residency and TINs and corresponding reporting of such information to Revenue would apply for a 2-3 year transitional period, pending the resolution of the final CRS list of Participating Jurisdictions. However, the reference to a transitional period has now been removed, and refers to the Wider Approach being required under the Irish CRS Regulations;
  • FAQ3: The link to the Irish Revenue Commissioners’ AEOI webpage has been updated;
  • FAQ 17: Clarified that where a self-certification fails the reasonableness test, a Reporting Financial Institution should not proceed with the opening of the account; and
  • FAQ18: Revenue confirmed that in all circumstances, an account cannot be opened in Ireland if a valid self-certification has not been obtained. If an account is opened without a valid self-certification form, then this is in breach of the Irish CRS legislation and the Reporting Financial Institution shall be liable to the penalties set out in the legislation.

In the limited circumstances where a Reporting Financial Institution is applying the guidance set out in OECD CRS FAQ 22, the Reporting Financial Institution should not allow a process longer than 90 days to obtain and validate a self-certification and in all circumstances, the Reporting Financial Institution should ensure that they have obtained and validated the self-certification within a period which allows them to meet their reporting obligations.

If a Reporting Financial Institution has not obtained a valid self-certification within the given timeframe, they should not proceed with the account opening process. It also follows that transactions should not be permitted on the account until the account opening process is concluded and a valid self-certification obtained.

Finally, a Reporting Financial Institution should note that OECD CRS FAQ 22 does not apply in circumstances where it is appropriate to apply the treatment allowed under Section VI(A)(1)(b) of the Standard and further described in OECD CRS FAQ 20 (i.e. reliance on publicly available information for new entity accounts).

Irish Participating Jurisdictions List

The Irish Revenue Commissioners recently confirmed they intend to finalise the list of Participating Jurisdictions for CRS and DAC2 by the end of November and the list will be applicable for due diligence procedures from 1 January 2018.

The current list of Participating Jurisdictions for CRS and DAC2 purposes available on the Irish Revenue Commissioners' AEOI Portal is dated 31 March 2017.

Updated AEOI Status of Commitments List

On 22 October 2017, the OECD published a revised AEOI Status of Commitments List. There are now 49 jurisdictions which are undertaking their first exchange of information in 2017 with respect to the 2016 calendar year and a further 53 jurisdictions which are undertaking their first exchange of information in 2018 with respect to the 2017 calendar year.

MCAA Signatories

On 30 August 2017, the OECD published a revised list of MCAA Signatories, bringing the total number of signatories to 95.

Foreign Account Tax Compliance Act (“FATCA”) - US TIN Collection

On 12 October 2017, the Irish Revenue Commissioners issued an update in relation to a recent IRS publication which provides guidance on the issue of the collection and reporting of TINs of US Persons by Foreign Financial Institutions (“FFIs”) for Pre-Existing Accounts (e.g. as at 30 June 2014) that are US Reportable Accounts under FATCA.

The IRS has acknowledged that for a small number of Account Holders, FFIs require additional time to obtain and report US TINs for US Persons with Pre-Existing Accounts and on that basis they have extended the time period for FFIs to obtain and report US TINs for Pre-Existing Account Holders.

The IRS has confirmed that for the 2017, 2018 & 2019 calendar years, the US Competent Authority will not determine that an FFI is in significant non-compliance with its obligations under FATCA solely for the failure to obtain and report US TINs for Pre-Existing Account Holders, provided that the FFI:

  1. Obtains and reports the date of birth of each Account Holder and Controlling Person whose US TIN is not reported;
  2. Requests annually from each Account Holder any missing required US TIN; and
  3. Before reporting information that relates to the 2017 calendar year, searches electronically searchable data maintained by the FFI for any missing required US TINs.

This means that for the 2020 calendar year, US TINs must be reported for Pre-Existing Accounts held by US Persons and it is expected that FFIs implement practices and procedures to obtain and report US TINs before 2020.

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