FATCA e-alert Issue 2014-01 | KPMG | LU
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FATCA e-alert Issue 2014-01

FATCA e-alert Issue 2014-01



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Rev. Proc. 2014-10 containing final FFI agreement

On 26 December the IRS released an advance copy of Rev. Proc. 2014-10 providing text of an agreement for foreign financial institutions (FFIs) entering into an FFI agreement with the IRS, so that these FFIs can be treated as “participating FFIs.”

Rev. Proc. 2014-10 (PDF, 381 KB) provides:

  • Text of the “final” FFI agreement
  • Guidance to FFIs and branches of FFIs treated as “reporting financial institutions” under a Model 2 intergovernmental agreement (IGA) on complying with the terms of the FFI agreement

The final FFI agreement contained in Rev. Proc. 2014-10 finalizes a draft FFI agreement (see our e-Alert 2013-26) and describes changes made to the draft FFI agreement.

Please note that the FFI agreement is not applicable to FFIs subject to Model 1 IGA.


Changes included in final FFI agreement

Among the changes made to the draft FFI agreement and finalized in the FFI agreement are measures that:

  • Modify several cross-references in the FFI agreement in anticipation of the future publication of temporary regulations (expected to be published in early 2014)
  • Contain revisions to correct “minor technical errors” in the draft FFI agreement (for example, the final FFI agreement removes an incorrect reference to an escrow procedure due to a change in circumstance of an account holder, and the 30-day period for this change of circumstances is corrected to a 90-day period)
  • Are intended to conform the FFI agreement to the temporary chapter 4 regulations (for example, the withholding rate pool and the reporting rate pool are defined and clarified)
  • Provide that for calendar years 2015 and 2016, participating FFIs that are required to report foreign reportable amounts paid to non-participating FFIs are to report this information on Form 8966
  • Establish a two-year transition period during which a reporting Model 2 FFI may elect to apply the due diligence procedures that are described in the FFI agreement (instead of those in Annex I of an applicable Model 2 IGA) and state that the FFI agreement is revised to reflect this election is made by reporting the Model 2 FFI (and not the reporting Model 2 IGA jurisdiction)


For further information, please do not hesitate to contact us.







Any tax advice in this communication is not intended or written by KPMG to be used, and cannot be used, by a client or any other person or entity for the purpose of (i) avoiding penalties that may be imposed on any taxpayer or (ii) promoting, marketing, or recommending to another party any matters addressed herein.The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.

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