FATCA Postponed – Implementation Time Table

September 28, 2011

IRS Notice 2011-53 delays both the FATCA §1471 withholding and reporting requirements one year to January 1, 2014, and phases in those requirements over two years starting in 2014.

The revised version of Notice 2011-53 extends the application of the phase-in to §1472 as well.

We have provided a Table Below listing the details of the time schedule as it relates to FATCA implementation.

This delay in the withholding and reporting procedures should allow enough time to permit FFIs to build their computer systems, request and receive any required regulatory approvals, and train appropriate personnel to comply with the rules.

Of course, whether enough time has been provided depends on the resolution of the conflict-of-law issues and the promulgation of proposed regulations by December 31, 2011, and final regulations by the summer of 2012.

Implementation of FATCA Requirements

Execution of FFI Agreements
Date on which the IRS will begin accepting applications to enter into FFI Agreements.	January 1, 2013
Last date to enter into an FFI Agreement to ensure that there is no withholding beginning on January 1, 2014. The effective date of all FFI Agreements entered into before July 1, 2013, will be July 1, 2013. FFI Agreements entered into after June 30, 2013, may not forestall withholding beginning on January 1, 2014.	June 30, 2013

Reporting of U.S. Accounts

Due Diligence
New Accounts	Transition Date Under Notice 2011-53

Participating FFIs must implement account opening procedures described in Notice 2010-60 to identify U.S. accounts.	On or after the effective date of the FFIA

Pre-Existing Accounts	Transition Date Under Notice 2011-53

Large Private Banking Accounts. Completion of Step 3 (Notice 2011-34) due diligence for private bank accounts with balances or values greater than or equal to $500,000.	Within one year of the effective date of the FFIA
Smaller Private Banking Accounts. Completion of private banking procedures for pre-existing private bank accounts with balances or values less than $500,000.	Later of December 31, 2014, or one year after the effective date of the FFIA
All Other Pre-Existing Accounts. Completion of due diligence procedures in Notices 2010-60 and 2011-34.	Two years after the effective date of the FFIA

New Accounts, Documented U.S. Accounts,

Transition Date Under 2011-53

and Private Banking Accounts

Limited Reporting for First Year: This limited reporting also applies to FFIs that elect to report as a U.S. FFI under §1471(c)(2)

• Name, address, and U.S. TIN of each U.S. person who is an account holder or, if the account is owned by a U.S.-owned foreign entity, name, address, and U.S. TIN of each substantial U.S. owner;

• The account balance as of December 31, 2013, or, for closed accounts, the balance immediately before closure; and

• The account number.

May elect to report under Notice 2011-34.

Must report any recalcitrant account holders.

Form W-9 received by June 30, 2014, must be reported to IRS by September 30, 2014

Post-2013 Years

Reporting in accordance with Notice 2011-34 as implemented in future regulations.

Withholding
Types of Withholdable Payments	Transition Date Under Notice 2011-53

U.S.-Source FDAP Payments (e.g., interest, dividends, royalties, rent, etc.).	Payments made on or after January 1, 2014
Gross Proceeds (i.e., gross proceeds from the sale of assets that produce or may produce U.S.-source FDAP income).	Payments made on or after January 1, 2015
Passthru Payments. Note that a U.S.-source FDAP payment that also would be a passthru payment is subject to the January 1, 2014, effective date.	Payments made on or after January 1, 2015

Other
Expiring QI, WFP, and WFT Agreements	Transition Date Under Notice 2011-53

Original expiration date of December 31, 2012	Automatic extension until December 31, 2013

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FATCA Postponed – Implementation Time Table