The online registration system for financial institutions that need to register with the IRS under the Foreign Account Tax Compliance Act (FATCA) is now open.
FATCA imposes a 30% withholding tax on certain payments made to foreign financial institutions and non-financial foreign entities that refuse to identify U.S. account holders and investors.
Read: IRS releases draft FATCA form
Financial institutions that must register with the IRS to meet their FATCA obligations can now create accounts and provide required information.
The new registration system enables financial institutions to:
- establish online accounts;
- customize home pages to manage accounts;
- designate points of contact to handle registrations;
- oversee member and/or branch information; and
- receive automatic notifications of status changes.
Starting in January 2014, financial institutions will be expected to finalize their registration information by logging into their accounts, making any necessary changes and submitting the information as final.
Read: FATCA adds to KYC burden for advisors
As registrations are finalized and approved in 2014, registering financial institutions will receive a notice of registration acceptance and will be issued a global intermediary identification number.
The IRS will electronically post the first IRS Foreign Financial Institution (FFI) List in June 2014, and will update the list monthly. To ensure inclusion in the June 2014 IRS FFI List, financial institutions will need to finalize their registrations by April 25, 2014.
Read: IRS offers six-month relief from FATCA
In July, the IRS announced the IRS would not require withholding until July 1, 2014. As well, new account opening procedures and related requirements would also begin July 1. (Read the full bulletin here.)