Implementing the Foreign Account Taxation Act (FATCA)

Firms that fail to comply with FATCA, the Foreign Account Tax Compliance Act will be subjected to a stringent 30% withholding tax on any US sourced income even if they do not have any US customers. FATCA, designed to crack down on tax avoidance by wealthy US citizens investing offshore, represents a complex and costly compliance task being forced upon financial services firms globally by the US tax authorities.
 
To avoid this withholding tax, UK firms will have to comply with the reporting requirements under FATCA by obtaining information for each account holder and then reporting this on an annual basis to the IRS. Account opening processes for new customers will also have to be amended to take into account the new information required under FATCA and systems will have to be updated to comply with the new requirements for withholding taxes.

The IRS have promised further clarity on FATCA regulations by February 2012. However, this will then leave a window of less than 18 months for firms to conduct their full impact assessments and to complete their implementations. Senior management teams need to take action now to ensure that they will be ready to comply by June 2013.

See our FATCA Implementation Timeline

The seminar which we are co-hosting with Berwin Leighton Paisner has been designed to offer practical insights into the steps firms should be taking to comply with the regulations. Topics covered will include:

• Update on the draft final regulations from the IRS
• Practical steps on pre-existing customer identification
• Changes required for new client on-boarding 
• Client communications issues/waivers of privacy
• Customer reporting to IRS
• Tax reporting/withholding.  

There will be opportunities for firms to learn from the experiences of others and to debate the best operational responses to key elements of the emerging regulations.

Map of event location