Notice 2015-66: Extended FATCA transition rules

IRS to extend FATCA transition rules

The IRS today released an advance version of Notice 2015-66 announcing that the Treasury Department and IRS intend to amend regulations under sections 1471-1474 to extend the time that certain FATCA transitional rules will apply. The notice also addressing the reporting of 2014 information under a Model 1 IGA.


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Notice 2015-66 [PDF 74 KB] provides that the amendments will extend:

  • The date for when withholding on gross proceeds and foreign passthru payments will begin
  • The use of limited branches and “limited foreign financial institutions” (limited FFIs)
  • The deadline for a sponsoring entity to register its sponsored entities and re-document such entities with withholding agents

The IRS notice also provides that to reduce compliance burdens on withholding agents that hold collateral as a secured party, Treasury and the IRS intend to amend the regulations under chapter 4 to modify the rules for grandfathered obligations in relation to collateral.

The transitional rules provided in Notice 2015-66 are intended to allow for and facilitate an orderly transition for withholding agents and FFIs regarding FATCA compliance and respond to comments regarding how the phase-out of transitional rules may affect information reporting and withholding systems.

In light of these comments and the successful engagement of Treasury and partner jurisdictions to conclude intergovernmental agreements (IGAs) to implement FATCA, Notice 2015-66 provides additional time for withholding agents and FFIs to modify their systems in stages as necessary to address the phase-out of the above-mentioned transitional rules consistent with the information reporting and compliance objectives of FATCA.

Notice 2015-66 finally provides information on the exchange of information by Model 1 IGA jurisdictions with respect to 2014.

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