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Global Information Reporting (FATCA and CRS)
Tax compliance for internationally active entities
When the U.S. Foreign Account Tax Compliance Act (FATCA) was introduced in 2010, compliance seemed a long way off. The time has arrived, and while the heaviest burden has fallen on non-U.S. financial institutions (including foreign domiciled banks, brokers and investment funds), multinational companies in nonfinancial services industries are also affected by requirements under these rules since they must disclose their substantial U.S. owners and U.S. withholding agents are equally perplexed since they must collect documentation and withhold 30% of certain payments made to anyone who is not FATCA compliant. The Internal Revenue Service has increased enforcement of tax information reporting and withholding requirements by increasing penalties for unfiled information returns and by creating a Foreign Payments Practice with more agents to conduct examinations and enforce compliance with the rules. Companies must refocus their efforts to develop sustainable programs for ongoing compliance. RSM can help.
Partly in response to FATCA, over 100 jurisdictions (but not the United States) agreed to implement the Common Reporting Standard, a FATCA like regime that requires financial institutions in participating jurisdictions to automatically send information about account holders to their jurisdictions of residence. Although the U.S. has not adopted CRS, multinational financial institutions with branches, subsidiaries or affiliates in CRS jurisdictions must nevertheless take action to comply with its requirements.
FATCA compliance programs for foreign financial institutions require annual responsible officer certification.
Understand the complexities associated with global reporting and withholding requirements for US private equity funds with foreign investors
Taking an integrated approach to FATCA and CRS compliance
Clients turn to RSM to help with a definitive sequence of events starting with information gathering and ending with filing information returns. We work with clients to assess their needs, manage risks and monitor response options. Our four-phase approach systematically maps the compliance journey.
Looking beyond implementation
FATCA compliance is ongoing; changing regulations and non-U.S. regimes require companies to consistently monitor changes and requirements and evolve their policies, procedures and systems. RSM provides value beyond the implementation by working with clients on:
- evaluating and implementing tax technology systems
- building the skills of your tax and finance functions
- representation before authorities in controversies involving tax reporting and withholding matters
- designing and testing internal controls
- assisting responsible officers with global certification processes
You have access to resources in the U.S. through RSM US LLP, and worldwide through RSM International, with resources on the ground wherever you operate and hold income and assets of U.S. citizens.
The IRS has issued guidance for withholding agents on the submission of delinquent international withholding forms.
Proposed regulations reducing burdens under the Foreign Accounts Tax Compliance Act and Chapter 3 provide relief for Withholding agents.
The deadline for FFIs to certify compliance and confirm their status rapidly approaches. Login to the FATCA portal now to avoid exposure.
IRS expands the list of international tax specific issue-based compliance campaigns identified by the LB&I division of the IRS.
The IRS has announced that it is currently planning to launch the FATCA certification portal in late July or early August.