In a recent conference in Washington, DC, IRS officials stated that financial institutions may continue to use existing certification forms through the end of 2014 when documenting non-U.S. entity accounts.
In Notice 2014-33, issued last month, the IRS announced that it will treat calendar years 2014 and 2015 as a transition period for purposes of enforcement and administration of the due diligence, reporting, and withholding provisions under chapter 4. An entity that has made good faith efforts to comply with the new requirements will be given relief from IRS enforcement during the transition period.
Additionally, in consideration of compliance challenges for new entity account opening procedures, resulting from the late release of Forms W-8 and the still pending instructions for Forms W-8BEN-E and W-8IMY, the Notice stated that the FATCA regulations would be amended to allow an entity account opened (or obligation obtained) before 1 January 2015, to be treated as a preexisting account/obligation for purposes of implementing the applicable due diligence, withholding, and reporting requirements. However, the regulations state that revised certification forms must be used within 6 months of the revision date on the form. For Forms W-8BEN-E and W-8ECI, this would be 1 September 2014 and Forms W-8IMY and EXP would be 1 November 2014.
According to the IRS official’s announcement, the IRS is preparing to announce its policy decision to permit withholding agents to delay the required use of the revised certification forms until 1 January 2015.
Representatives of the governments of the United States and Liechtenstein signed an intergovernmental agreement (IGA) to implement U.S. law known as FATCA (Foreign Account Tax Compliance Act).
According to a release from the Government of Liechtenstein, the FATCA agreement was signed on 16 May 2014.
Text of the IGA is not yet publicly available
The U.S. Treasury Department updated its FATCA webpage to report that Azerbaijan reached an “agreement in substance” for a Model 1 intergovernmental agreement (IGA) with the United States and consented to this status as of 16 May 2014.
In early April 2014, the IRS and Treasury Department announced that foreign financial institutions (FFIs) located in a jurisdiction that has reached an “agreement in substance” with the United States, under the FATCA regime, will be treated as having an agreement in effect until the end of 2014.
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