Cayman Releases v2.1 of its Guidance Notes

[v2.1 Guidance Notes; July 1, 2015]

Section Amendment
1.3 Purpose of these Guidance Notes Additional text: In considering compliance with the Regulations, the Competent Authority shall take into account the extent to which a Financial Institution or persons have relied on these Guidance Notes.
2.2 Cayman Islands Financial Institution Amendments and additional text: A dual resident entity (i.e. an entity organised under the laws of the Cayman Islands and also resident for these purposes in another jurisdiction) will need to apply the Cayman Islands Regulations in respect of any Reportable Accounts maintained in the Cayman Islands unless it has actual knowledge that it is undertaking the appropriate reporting in the other jurisdiction.A Financial Institution will have actual knowledge where it holds written confirmation that the Reportable Accounts have been reported for FATCA purposes or under an agreement equivalent to the UK Agreement.There may be other situations involving related or unrelated entities where the reporting requirements are being met elsewhere and duplication of reporting can be avoided. In these circumstances responsibility rests with a Financial Institution to satisfy itself that the reporting requirements are being met.
2.8.1 Cayman Branches Reporting to the IRS via Form 1099 – US Agreement only New section added: Where all US reportable accounts of a Cayman branch of a US banking institution are already being reported to the IRS on Form 1099 annually, the Cayman branch is not  required to file a report locally.A Cayman branch of a U.S. or foreign banking institution that meets this criterion is required to comply with the notification requirements in the regulations and complete the Cayman AEOI portal notification. Additionally, the Cayman branch must record and retain documentary evidence of the US reporting, and the decision not to file a return locally, to be made available to the Competent Authority when required.
6.7 Information to be reported – trusts as Investment Entities Amendments and additional text: A loan made to a trust which is an Investment Entity is a Financial Account because the lender holds a Debt Interest in that Investment Entity. Provided the lender is not itself a Financial Institution the loan would be reportable whether or not it is made by a settlor or beneficiary.Where a loan has been made to a settlor or beneficiary, the outstanding loan is considered a debt due to the Trustees for the benefit of the Trust. The debt due is an asset of the Trust, and no distribution arises. If and when the  loan  is written off, then there is a distribution of that amount (written off) to the debtor, which should be reported.
6.12 Employee Benefit Trusts Additional text: A beneficiary to an employee benefit trust has an interest with a positive net asset value only to the extent that the value of the assets set aside in trust are sufficient to currently pay all employee benefit obligations in which the beneficiaries are vested; however, with respect to beneficiaries who are receiving current payments from the employee benefit trust, the amount reportable is the amount of any payments made to the beneficiary.
6.14 Private Trust Company Amended text: A Private Trust Company (PTC) which is registered, or a similar trust company which is licensed, and conducting business in or from within the Islands, may be considered a Financial Institution for these purposes.In the case of a trust of which a PTC is the trustee and the trust has all its income derived from financial assets, under the definitions of Investment Entity outlined in Section 2.9, the trust may be a Financial Institution. If the trust is not a Financial Institution, it will be an NFFE, and its activity will determine whether it is a Passive or Active NFFE. If a trust is a Passive NFFE, the Financial Institution where the trust holds Financial Accounts will be required to undertake the necessary due diligence procedures to determine if the account is a Reportable Account.
14.5 Identification of New Individual Accounts Deletion of paragraph 4
17.3 Nil Returns Amended text: The filing of nil returns is non-mandatory under the Regulations, although there is the facility for financial institutions to submit nil returns via the AEOI Portal at their own option. Financial institutions with no reportable accounts will still need to complete the notification requirement via the AEOI Portal.
Appendix 2 Extension of ARR election date in 2015 to 30 September 2015
UK Agreement – Specific Elements
Appendix 3 AEOI Portal User Guide AEOI Portal User Guide link provided

Entry into Force of Brazil-U.S. IGA Noted in White House Fact Sheet

[White House Fact Sheet; June 30, 2015. Ed. note- June 23, 2015, legislative approval by Brazil]

The White House
Office of the Press Secretary
For Immediate Release

FACT SHEET: The United States and Brazil – A Mature and Multi-Faceted Partnership

Today President Barack Obama hosted Brazilian President Dilma Rousseff at the White House.  Their meeting underscored the long-standing and increasingly diverse partnership between the United States and Brazil, which is rooted in a shared commitment to expand inclusive economic growth and prosperity; promote international peace and security and respect for human rights; strengthen bilateral defense and security cooperation; and deepen our people-to-people ties through exchanges in education, energy, health, science and technology, and innovation.  The visit highlighted our cooperation in the following areas:

Expanding Economic Growth and Prosperity

  • Social Security Agreement:  The United States and Brazil seek to ease the burden on companies in order to facilitate job creation and growth, while enhancing the protection of our workers.  To support this effort, the United States and Brazil have signed a Social Security Totalization agreement.  This agreement will eliminate dual Social Security contributions, which occur when a worker from one country works in another country.  It will also close the gaps in benefit protections for workers who divide their careers between the United States and Brazil.  With trade and investment rapidly growing between our two countries, the United States estimates that this agreement will save U.S. and Brazilian companies more than $900 million over the first six years.
  • Standards Alignment to Promote Trade:  Recognizing the importance of aligning standards and standards-related work to increasing trade and investment, the United States Department of Commerce and the Brazilian Ministry of Development, Industry and Foreign Trade signed a memorandum of intent (MOI) to expand cooperation between the two ministries on standards and conformity assessment.  The MOI emphasizes work with relevant public and private stakeholders, including U.S. and Brazilian standards developing organizations and trade associations, to promote cooperation on standards and conformity assessment to stimulate development and competitiveness.
  • Mutual Beef Market Access:  The United States and Brazil are two of the world’s largest agricultural producers and exporters, and we agreed to expand bilateral beef trade by undertaking science-based risk rulemaking in 2013.  The United States of Department of Agriculture is amending its regulations to allow the importation of fresh beef from Brazil under specific conditions that mitigate the risk of foot-and-mouth disease.  Additionally, the United States and Brazil are working to ensure that any Brazilian meat imported into the United States for human consumption complies with U.S. public health and food safety regulations.  Brazil is taking action to expand U.S. beef access in the near future.
  • Providing United States Passenger Service System to LATAM Airlines:  Supported by a United States Trade and Development Agency training grant for TAM Airlines, U.S. travel technology provider Sabre will provide its passenger service system to LATAM Airlines Group.  In 2012, the LATAM Airlines Group was formed by the Chile-based airline, LAN, and the Brazil-based airline, TAM.  TAM, LAN, and their affiliates will now operate on Sabre’s technology across LATAM’s entire global network.  LAN is a long-time Sabre customer and TAM’s migration to Sabre’s platform will represent the largest-ever implementation of a passenger service system for Latin America’s commercial aviation industry.  Sabre’s comprehensive software and data solutions will help these airlines market themselves, sell products, serve customers and operate more efficiently and consistently across their entire network.   These solutions empower airlines to make smarter operational decisions as well as personalize and retail their products to travelers.
  • Foreign Account Tax Compliance Act:  The United States welcomes the entry into force of the agreement between

IRS Adds/Updates FATCA IDES Technical FAQs

[FATCA IDES Technical FAQs; June 22, 2015, June 25, 2015]

Data Format and Structure

C12. Can an HCTA [Host Country Tax Authority -Ed.] create its own standard numbering format for the MessageRefID in the FATCA XML Schema for its financial institutions to use?

Yes. The only requirement is that the field be unique for each sender for the lifetime of the system and that it not exceed the maximum length of 200 characters.

Updated:  06-22-2015

C14. When submitting a file with amended or corrected entries, what should be included in the MessageRefId field?
The MessageRefId should be a unique identifying number for the new file that includes the updated entries. The CorrMessageRefId should be the MessageRefId of the original file submission.

Updated:  06-22-2015

C15. How can HCTAs and filers ensure that the DocRefID they are using is unique across all reporting FIs ?
The DocRefID data element should be a unique identifier of a correctable item across all reporting financial institutions and reporting periods. To ensure the identifier is truly unique, the IRS will be requiring the following format rule for creation of the DocRefID beginning October 1, 2015.  Until that time (i.e. for files submitted up through September 30, 2015), the IRS will accept DocRefIDs that comply with either the old DocRefID or this new format.  This transition period will allow those who want to begin using the new DocRefID rules to begin using them now to ensure uniqueness amongst FFIs, but it will not force those who prefer to continue using the old DocRefID rules to adopt the new rules until October 1, 2015.

  • The data format is <reporting FI GIIN><period character (.)><unique value across all time for the reporting FI>
  • The first part – <reporting FI GIIN> is the GIIN for the reporting FI associated with the reporting group
  • The second part is a period character (.)
  • The third part – <unique value across all time for the reporting FI> is an identifying value for the referenced record that is unique within the reporting FI for all time. Use of a GUID is recommended but not required.

This element should contain at least 21 characters, which includes the first part – reporting FI GIIN, the second part – period character (.), and at least one alphanumeric character to represent the third part. The maximum length of DocRefID is 200 characters.
DocRefID Examples:
S519K4.99999.SL.392.12291cc2-37cb-42a9-ad74-06bb5746b60b
127BM7.00001.ME.124.406abc8a1830490e847890ba3b13a646

Updated:  06-22-2015

Data Encryption and Security

E15. If an entity has multiple domain names (e.g. different in each country, fund domain name vs. company domain name, etc.), is there any guidance on which domain name should be used for obtaining the certificate?
Whichever organization is planning on doing the actual filing, is the only organization that requires a certificate and that is the one whose domain name should be used for the certificate..

Updated:  06-22-2015

E18. During testing, we have experienced issues with decrypting the notification file. Are there any lessons learned or best practices that you can share?

The IRS has posted a variety of different methods for decrypting notifications on Github in the IRSgov repository.

Updated:  06-22-2015

IDES Use for Entities Not Required to Obtain a GIIN

F3. How do I complete the FATCA XML Schema if I am a third party preparer or other entity that is not required to have a GIIN?
If you are a third party preparer (not a sponsoring entity) or commercial software vendor and you are submitting the FATCA XML Schema on behalf of another entity (or on behalf of several other entities), enter your FIN, which you obtained to enroll and use IDES, in (1) “SendingCompanyIN” data element in the FATCA XML Schema Message Header and (2) “FATCAEntitySenderID” data element in the FATCA XML Metadata Schema.

Note: For reporting with respect to calendar year 2014, a third party preparer or commercial software vendor filing on behalf of an entity with a filing deadline of March 31, 2015, has until June 29, 2015, to submit the FATCA XML Schema.  For additional information, please read FAQ Q2 under the “Reporting” section on the General FAQ page.

Updated:  06-22-2015

F6. I am a third-party tax preparer.  The tax authorities in my country have indicated they have elected Model 1 Option 2 for FATCA Reporting.  How may I enroll to use IDES to transmit FATCA reporting information?
You can request a FATCA Identification Number (FIN) to enroll in IDES and submit FATCA Reports. If you are reporting information to a Model 1 Option 2 (M1O2) jurisdiction, you MUST obtain a FIN where the last three digits correspond to the ISO Country Code for the M1O2 jurisdiction.  If you are reporting on behalf of other jurisdictions, you should obtain a second FIN with the jurisdiction code of ‘Other’ to report for those other jurisdictions.

Please consult your local jurisdiction to determine if it has elected Model 1 Option 2 for FATCA reporting. Review the IDES Resources and FIN web pages for information about how to obtain a FIN and enroll in IDES.

Added:  06-25-2015

F7. I am a third-party tax preparer located in a Model 1 IGA jurisdiction.  I am responsible for reporting on behalf of clients in Model 2 IGA and non-IGA jurisdictions. I obtained a FIN but IDES will not accept my enrollment.  How can I enroll in IDES?
The general rule for FATCA is that reporting entities in Model 1 IGA jurisdictions do not report directly to the IRS, but instead report directly to their host country tax authority.  IDES follows the business rules of the IGAs.  In order to use IDES to report you need to request a FIN that identifies your tax jurisdiction code as ‘Other’.  Review the IDES Resources and FIN web pages for information on obtaining a FIN and enrolling in IDES.

Added:  06-25-2015

 

Form 8966 Deadline for FFIs in Jurisdictions without Signed or Agreed-in-Substance IGAs

In accordance with Treas. Reg. 1.1471-4T(a)(3) and the 2014 Instructions for Form 8966, all FFIs that wish to be treated as Participating FFIs must, among other things, report annually using Form 8966. This reporting obligation is imposed on all Participating FFIs within both Model 2 Intergovernmental Agreement (“IGA”) jurisdictions and jurisdictions in which no IGA has been signed or treated as signed (“non-IGA jurisdictions”). The deadline for Form 8966 FATCA reporting is June 29, 2015.  Note that “nil returns,” or returns containing no reportable accounts, are not required for Participating FFIs.

Deadline for Form 8966 extension request

To provide additional time for reporting issues, the IRS released the Request for Additional Extension of Time to File Form 8966 for Tax Year 2014 template on June 9, 2015, to facilitate 90-day filing extension requests. A separate request must be submitted for each filer requiring an extension. The template must be mailed to the address provided with the template instructions on or before the deadline for filing Form 8966, which is June 29, 2015. Note that Reporting Foreign Financial Institutions (“FFIs”) in Model 2 jurisdictions are not entitled to an extension for aggregate reporting on non-consenting U.S. accounts or non-consenting nonparticipating FFIs.  Additionally, entities in Model 1 jurisdictions may not request extensions as they must report directly to local tax authorities by the deadlines set in the relevant jurisdictions.

All requests will be automatically approved for eligible filers who submit a request, and, as such, the IRS will not send responses. The 2014 Instructions for Form 8966 state that additional extensions beyond the initial extension require statements of hardship. However, such statements are not necessary for tax year 2014 as the request form does not require them and requests are automatically granted.

FATCA FAQs for U.S. Citizens Released by Ireland

[June 25, 2015]

Foreign Account Tax Compliance Act (FATCA) Information for Account Holders What is FATCA?

FATCA stands for the Foreign Account Tax Compliance Act and is a United States (US) initiative aimed at reducing the potential for off shore tax evasion by requiring financial institutions outside the United States to provide the Inland Revenue Service (IRS) with financial account information they hold on US citizens. In 2012, Ireland entered into an agreement with the United States to participate in this information exchange initiative and financial institutions will commence reporting this information to Revenue in June 2015.

How does it work?

Each year, reporting financial institutions are required to review the accounts they hold and identify account holders who are US citizens and then report details of US account holders to Revenue.

Revenue will then exchange this information with the IRS.

What type of financial institutions and accounts are covered by FATCA?

The definition of financial institution for FATCA purposes is quite broad and covers a number of different types of Irish institutions such as banks, investment entities which trade in money market instruments or invest, administer or manage funds or money on behalf of other persons, trusts, investment limited partnerships and certain types of insurance companies that have cash value products or annuities.

Accounts on which financial institutions are then required to report cover deposit accounts, custodial accounts, certain types of investment accounts and insurance and annuities contracts.

I am an Irish citizen, how does FATCA affect me?

The purpose of FATCA is to identify US citizens who hold financial accounts outside of the US, therefore for Irish citizens with no ties or links to the US, FATCA will have no impact.

I am an US citizen, how does FATCA affect me?

As the purpose of FATCA is to identify US citizens who hold financial accounts outside of the US, your financial institution may be in touch with you to ask you to confirm your citizenship. There may also be instances where you are no longer a citizen of the US or it is not clear whether or not you are a  US citizen and in these instances a financial institution may also contact you and ask you to confirm your citizenship.

For example, where an account holder was born in the US and emigrated at an early age or was briefly working the in the US, when completing their account holder review, a financial institution may identify information, such as an address or telephone number associated with the account which indicates that an account holder has ties with the US and may be a citizen of the US. In these instances the financial institution will contact account holder asking them to provide documentation confirming their US citizenship. This is known as ‘self certification’ and financial institution have various procedures in place for this purpose.

What documentation should I provide to a financial institution to verify that I am a non US citizen?

 All of the following documents should be provided to a financial institution:

  1. A completed FATCA self-certification form showing that you are neither a US citizen or a US resident for tax
  2. A non US passport
  3. A copy of a Certificate of Loss of Nationality of the US, or a reasonable explanation, or the reason you do not have such a certificate, or the reason you did not obtain US citizenship at birth.

Would a Certificate of Loss of Nationality be available in circumstances where an account holder has surrendered their passport for reasons of dual nationality?

If an account holder has surrendered their passport for reasons of dual nationality, a Certificate of Loss of Nationality is the document that is issued to individuals when they renounce their US citizenship and relinquish their passport, and so a certificate should be available in these circumstances.

Circumstances in which an account holder would not hold a Certificate of Loss of Nationality 

In some circumstances a Certificate of Loss of Nationality of the US would not be available to an individual. For example the issuing of Loss of Nationality Certificates did not become common practice until the late 1950’s, therefore the non holding of a certificate prior to this time would be considered a reasonable explanation as to why would you not hold a valid Certificate and you could be considered a non US person without producing the Certificate in these circumstances.

What should I do when asked for this information? 

As financial institutions are legally obliged to report information on US account holders to Revenue, account holders should advise their financial institution of their citizen status which will allow the financial institution to report accurately.

What type of information will the financial institution report to Revenue? 

Financial institutions are required to report the following to Revenue:

  • Name, Address, Tax Reference Number (TIN) and account number of US account
  • Name and identifying number of the financial
  • Account Balance or value at year
  • Payments made with respect to the account during the calendar

Where should I go for more information? 

The Revenue Commissioners have provided detailed FATCA information for financial institutions on their website and this can be accessed here.

Further information in relation to FATCA can also be accessed here on the IRS website.

Irish Revenue Limits FFI Status for Holding Companies and Treasury Companies

[Revenue eBrief No. 57/15: 17 June 2015]

Foreign Account Tax Compliance Act (FATCA) Update

The Foreign Account Tax Compliance Act (FATCA) requires financial institutions to register with the US Inland [sic] Revenue Service (IRS) and report account information with respect to US persons, including account balances, interest payments, value of insurance contracts and proceeds of sale of financial assets. Legislation was introduced in the Finance Act 2013 and Regulations were made in June 2014 compelling Irish financial institutions to collect and return the agreed information to Revenue. This information will then be transmitted to the IRS. Financial Institutions must begin reporting the required information to Revenue by the end of June 2015 for exchange with the IRS in September 2015. Revenue will receive similar information from the IRS regarding Irish taxpayers.

Following further guidance issued by the IRS, Revenue has revised the treatment of Holding Companies and Treasury Companies for the purposes of FATCA as outlined in S.I. 292 of 2014 (FATCA Regulations), and the related Guidance Notes (PDF 1.30 MB) published on the Revenue website.

While Relevant Holding Company and Relevant Treasury Company have been included in the list of Financial Institution categories as outlined in Regulation 3 of the FATCA Regulations and Chapter 2 of the Guidance Notes, this is not consistent with the Ireland / United States Inter Governmental Agreement (IGA) , (PDF 243 KB) which defines a Financial Institution as “a Custodial Institution, a Depository Institution, an Investment Entity or a Specified Insurance Company”. Accordingly a Holding Company or Treasury Company will only be considered a Financial Institution if it meets the definition of the four Financial Institution categories specified in the definition above. [Emphasis added.-Ed.]

Where a Holding Company or Treasury Company does not fall into one of the above-mentioned categories of Financial Institution it will be classed as a Non-Financial Foreign Entity (NFFE), and will fall into the category of “active” or “passive” in accordance with the criteria set out in Appendix 2 of the Guidance Notes.

However, where a Holding Company or Treasury Company of a financial group no longer meets the definition of Financial Institution and had previously identified itself as a Relevant Holding Company or Relevant Treasury Company and completed its FATCA registration as the lead Financial Institution of an Expanded Affiliated Group (EAG), Revenue will allow the entity to continue to treat itself as the lead Financial Institution for reporting purposes. While the entity may act as the lead Financial Institution for filing purposes, it will still not fall within the definition of Financial Institution and so will have no Irish reporting obligations in its own right.

While updated Regulations and Guidance Notes will issue to reflect these changes, as a transitional arrangement the position as outlined in this notice can be applied.

Cayman Addresses EU Blacklisting

[Press Release; June 18, 2015]

Cayman Islands: Statement From The Minister Of Financial Services, Wayne Panton

Cayman Addresses EU Blacklisting

Last Updated: 18 June 2015

The Cayman Islands Government is aware that the EU’s blacklist is based upon the individual, national blacklists of EU countries. However, we also are aware that major European economies, which have been rated similar to the Cayman Islands on upholding international standards on transparency, do not list our jurisdiction.

The national blacklists that have resulted in this overall blacklisting are primarily generated by European countries that are not major economic trading partners of the Cayman Islands. These countries therefore may not be aware of Cayman’s adherence to standards, both in terms of our bilateral and multilateral agreements for exchange of information.

Save for Bulgaria, we have EOI mechanisms with all of the jurisdictions that have blacklisted Cayman.

It is unfortunate that the EU black list unfairly downplays the significant strides made by Cayman, as well as the significant global accomplishments in the area of transparency.

Fact Sheet: Cayman’s Participation and Cooperation in Global Transparency Measures

  1. Operationally, in March 2015 Cayman announced the opening of our portal for automatic exchange of information (AEOI), which completes our process for building an AEOI compliance framework.
  2. In 2014 Cayman passed an amendment to its Tax Information Authority Law that enables all forms – automatic, spontaneous, and by request – of exchange of information for tax purposes.
  3. Cayman is one of more than 50 jurisdictions committed to undertaking the first AEOI exchanges for tax purposes, under the Common Reporting Standard, by 2017. The CRS is the OECD’s mechanism that standardises global AEOI.
  4. Cayman has 35 signed tax information-exchange agreements, with a number of others in negotiation.
  5. Cayman signed early commitments to US and UK FATCA in 2013. In regard to the US, today we now have more than 27,000 registered foreign institutions that have registered with the US Internal Revenue Service, which is one of the strongest representations of jurisdictional cooperation with FATCA.
  6. Cayman sits on the 19-member Steering Group; and the 30-member Peer Review Group, of the OECD’s Global Forum on Transparency and Exchange of Information for Tax Purposes. The Global Forum is the largest tax body in the world, with 127 member countries.
  7. Furthermore, Cayman is one of the Global Forum’s four vice-chairs, which carry out extensive Peer Reviews to evaluate the tax information exchange regimes of OECD and non-OECD countries.
  8. Cayman was rated as largely compliant in the Global Forum’s rankings released in 2013.
  9. Our regime of providing tax information to relevant authorities, from data collected, verified and maintained by licensed and regulated corporate service providers, has been in place for 15 years, and is firmly in line with the G20’s High-Level Principles on Beneficial Ownership Transparency, which were issued in November 2014. We therefore align with principles that the G20 countries themselves uphold as the standard.
  10. In addition to the Global Forum, Cayman’s engagement in international regulatory initiatives includes our participation since 2005 in the EU Savings Directive; and our membership through CIMA in the Offshore Group of Banking Supervisors; Working Group on Cross Border Banking; Caribbean Group of Banking Supervisors; and the Association of Supervisors of Banks of the Americas (ASBA), among others.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

Cayman Moves Forward with Implementing the CRS

[Industry Advisory; June 16, 2015]

The Department of International Tax Cooperation (DITC) is moving forward with implementing the Common Reporting Standard (CRS), via the introduction of local regulations, by October 2015.

In anticipation of the local regulations for CRS, financial institutions may wish to begin preparations for new account opening procedures from 1 January 2016; and for the due diligence required in 2016 and 2017. Financial institutions should also consider initiating administrative preparations and IT system developments.

The local regulations will be fully in line with the CRS and thus financial institutions will be able to continue their preparation for implementation by referring to the published CRS, issued by the OECD in 2014. The CRS and its commentaries can be found at http://www.oecd- ilibrary.org/taxation/standard-for-automatic-exchange-of-financial-account-information-for-tax- matters_9789264216525-en.

Cayman has committed to the following timetable under the CRS, in accordance with the Multilateral Competent Authority Agreement that was signed by Minister of Financial Services Wayne Panton, along with representatives from more than 50 other jurisdictions, in October 2014.

  • Pre-existing accounts are those that are open on 31 December 2015; new accounts would be those opened from 1 January 2016. Hence, by 1 January 2016, industry will be required to have new account-opening procedures in place to record tax
  • The due diligence procedures for identifying high-value pre-existing individual accounts will be required to be completed by 31 December 2016, while the due diligence for low-value pre-existing individual accounts and for entity accounts will be required to be completed by 31 December
  • The first reporting from industry to the DITC is anticipated to be required by 31 May 2017, under the local regulations.

The joint Ministry/industry working group, chaired by Financial Services Councillor Roy McTaggart, continues to assist Government with this important project. Further updates will be circulated as implementation progresses.

South Africa Requests Comments on FATCA Non-compliance Penalties

The South African Revenue Service (SARS) has requested comments on a draft Public Notice setting out incidences of FATCA non-compliance subject to administrative penalties. South Africa signed a Model 1 Intergovernmental Agreement (IGA) with the U.S. on June 9, 2014.

The request notes that under the IGA, SARS is required to ensure compliance with the requirements of the IGA by, among other things, prescribing penalties. The draft Public Notice prescribes administrative non-compliance penalties for incidences of non-compliance related to the obligations of financial institutions under the IGA.

Comments on the draft Public Notice must be submitted on or before June 22, 2015.

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