Recommendations are being prepared, say industry associations
Before an audience of almost 200 finance professionals gathered at the Chamber of Commerce for a 1 April KPMG Luxembourg conference, industry associations gave reassurance that – although ink only touched paper 3 days ago – the preparation of FATCA guidelines was already well underway long before Luxembourg’s agreement with the United States on the automatic exchange of information was signed.
Gérard Laures, KPMG Tax Partner and Chairman of the Association of the Luxembourg Fund Industry (ALFI) working group on FATCA, explained:
“80 pages of ALFI guidelines in the form of FAQs”
“The ALFI working group is working intensively on guidance in the form of FAQs. The document already is 80 pages big. This is without even touching on reporting, one of the four main pillars of the handbook for which we’ll require further information from the Luxembourg tax authorities over the coming months.”
Frederic Batardy, chairman of the ABBL working group on FATCA, and Christian Eilert, Director of the ACA, both confirmed that the Banking and Insurance industry were also working on their own specific guidelines. To ensure consistency, the groups are coordinating efforts to create a harmonized approach to implementation.
Entity classification, registration, customer due diligence and reporting are the four main action points for institutions who fall under the scope of FATCA. An early deadline of 5 May has been set for companies meeting certain criteria or who wish to be first on the registered list, however 22 December will be the date that most Luxembourg in-scope institutions will have to bear in mind as a final deadline for registration.
Alphonse Berns of the Luxembourg Ministry of Finance underlined, however, that FATCA is not the last initiative that Luxembourg will see on this topic:
“US FATCA, the beginning”
“FATCA started the process back in 2008 and its effects have been far-reaching. It has influenced the OECD’s common reporting standards, which have now been finalised, have the buy in of the G20 and should be adopted early May.”
The OECD common reporting standards will bring a worldwide consensus on the automatic exchange of information, meaning financial centers around the globe will respect the same transparency rules.