Source: https://profwilliambyrnes.com/2014/04/24/irs-releases-new-fatca-faqs/
Timestamp: 2019-04-19 02:55:14+00:00

Document:
On Thursday, April 24 the IRS released 10 new FATCA FAQs embedded within a previous release of FAQs, as well as reordering the FAQs. For the subscribers of Lexis Guide to FATCA Compliance, below I have highlighted in RED the additional FAQs for your quick review and highlighted your attention to the amended FAQ sections. For additional FATCA Updates for subscribers, see my link to FATCA Critical Updates and Analysis.
Q1. How does a Financial Institution that is not currently a Qualified Intermediary (“QI”), a Withholding Foreign Partnership (“WP”), or a Withholding Foreign Trust (“WT”) register to become one?
Q2. How do FIs that are currently QIs, WPs and WTs renew their agreements?
Q3. I am not currently a QI/WP/WT. Can I use the LB&I registration portal to register for FATCA and become a new QI/WP/WT?
Q4. Must an FI become a QI/WP/WT in order to register under FATCA? An FI is not required to obtain QI/WP or WT status to register under FATCA. If at the time of FATCA registration, the FI does not have in effect a withholding agreement with the IRS to be treated as a QI, WP or WT, the FI will indicate “Not applicable” in box 6 and will continue with the registration process.
Q5. If an FFI has a QI/WP/WT agreement in place, does the Responsible Party for purposes of the QI/WP/WT Agreement also have to the serve as the FFI’s Responsible Officer? No, the FFI’s Responsible Party for purposes of a QI/WP/WT Agreement does not have to be the Responsible Officer chosen by the FFI for purposes of certification under the regulations or for FATCA Registration purposes.
Q6. If a member of the Expanded Affiliated Group is a Qualified Intermediary/Withholding Trust/Withholding Partnership, does the Lead Financial Institution renew the Qualified Intermediary/Withholding Trust/Withholding Partnership agreement on behalf of the member or does the member renew its own agreement? Each Member FI with a Qualified Intermediary/Withholding Trust/Withholding Partnership (“QI/WP/WT”) agreement will renew its own agreement on the registration system. When a Member is completing its registration it will be asked about whether it maintains and seeks to renew a QI/WP/WT agreement with the Service. If the Member indicates it has one of these agreements and would like to renew the agreement, the Member will do so in Part 3 of the registration system in addition to claiming status as a participating FFI or registered-deemed compliant FFI (and obtaining its required GIINs).
Q2. How do Foreign Financial Institutions in Model 1 jurisdictions register on the FATCA registration website?
Q3. How do Foreign Financial Institutions in Model 2 jurisdictions register on the FATCA registration website?
Q4. We are an FFI in a country that has not signed an IGA, and the local laws of our country do not allow us to report U.S. accounts or withhold tax. What is our FATCA classification?
Unless the Treasury website provides that your country is treated as having an IGA in effect, then, because of its local law restrictions, this FFI should register as a Limited FFI provided it meets the definition shown directly below. SeeFATCA – Archive for a list of countries treated as having an IGA in effect.
Q5. In a Model 1 IGA jurisdiction, does the FFI need to fill out Question 10 about Responsible Officers? Yes, if an FFI treated as a reporting Model 1 FFI wishes to have a GIIN, a Responsible Officer must be designated in Part 1, line 10 of Form 8957. Please see the FAQs on Responsible Officers for further information.
Q1 For registration purposes, can an EAG with a Lead FI and 2 Member FIs be divided into: (1) a group with a Lead FI and a member FI, and (2) a member FI that will register as a Single FI? Yes. An EAG may organize itself into subgroups, so long as all entities with a registration requirement are registered. An FI that acts as a Compliance FI for any members of the EAG is, however, required to register each such member as would a Lead FI for such members.
Q2. What is required for an entity to be a Lead FI? A Lead FI means a USFI, FFI, or a Compliance FI that will initiate the FATCA Registration process for each of its Member FIs that is a PFFI, RDCFFI, or Limited FFI and that is authorized to carry out most aspects of its Members’ FATCA Registrations. A Lead FI is not required to act as a Lead FI for all Member FIs within an EAG. Thus, an EAG may include more than one Lead FI that will carry out FATCA Registration for a group of its Member FIs. A Lead FI will be provided the rights to manage the online account for its Member FIs. However, an FFI seeking to act as a Lead FI cannot have Limited FFI status in its country of residence. See Rev. Proc. 2014-13 to review the FFI agreement for other requirements of a Lead FI that is also a participating FFI.
Q3. Can a Member FI complete its FATCA registration and obtain a GIIN if the Lead FI for that Member FI has not yet registered under FATCA?
No, a Member FI can only register after its Lead FI has registered. When the Member FI does register, it should indicate in Part 1, line 1, that it is a member of an expanded affiliated group.
In Part 2 of the Lead FI’s registration, the Lead FI will add basic identifying information for each Member, and the system will create the Member FATCA accounts. Each Member FI will then be required to log into the system and complete its registration.
Q4. Is a limited FFI who is a member of an Expanded Affiliated Group subject to Chapter 4 withholding? Yes. A limited FFI (regardless of whether it is a member of an Expanded Affiliated Group) must identify itself to withholding agents as a nonparticipating FFI and, as a result, is subject to Chapter 4 withholding. Thus, while limited FFIs are generally required to register, they will not be issued GIINs.
Q1. We are a Sponsoring Entity, and we would like to register our Sponsored Entities. How do we register our Sponsored Entities?
Q1. What is a Point Of Contact (POC)? The Responsible Officer listed on line 10 of Form 8957 (or the online registration system) can authorize a POC to receive FATCA-related information regarding the FI, and to take other FATCA-related actions on behalf of the FI. While the POC must be an individual, the POC does not need to be an employee of the FI. For example, suppose that John Smith, Partner of X Law Firm, has been retained and been given the authority to help complete and submit the FATCA Registration on behalf of an FI. John Smith should be identified as the POC, and in the Business Title field for this POC, it should state Partner of X Law Firm.
Q2. Is the Responsible Officer required to be the same person for all lines on Form 8957 or the online registration (“FATCA Registration”)?
Q3. The Instructions for Form 8957 state that for purposes of Part 1, question 10, “. . . RO means the person authorized under applicable local law to establish the statuses of the FI’s home office and branches as indicated on the registration form.” What does it mean for an RO to have the authority to “establish the statuses of the FI’s home office and branches as indicated on the registration form”? To have the authority to “establish the statuses” for purposes of question 10, an RO must have the authority to act on behalf of the FI to represent the FATCA status(es) of the FI to the IRS as part of the registration process. This RO must also have the authority under local law to designate additional POCs.
Q4. My FI plans on employing an outside organization (or individual) solely for the purpose of assisting with the registration process. Once registration is complete, or shortly thereafter, my FI intends to discontinue its relationship with this organization. Is this permissible under the FATCA registration system? How should my FI use the registration system to identify this relationship?
Q1. Are U.S. Financial Institutions (USFIs) required to register under FATCA? If so, under what circumstances would a USFI register? A USFI is generally not required to register under FATCA. However, a USFI will need to register if the USFI chooses to become a Lead FI and/or a Sponsoring Entity or seeks to maintain and renew the QI status of a foreign branch that is a QI. Furthermore, a USFI with a foreign branch that is a reporting Model 1 FFI is required to register on behalf of its foreign branches (and should identify each such branch when registering). A USFI with non-QI branch operations in a Model 2 jurisdiction or in a non-IGA jurisdiction is not required to register with the IRS.
Q2. Is a Foreign Financial Institution (“FFI”) required to obtain an EIN? If the FFI has a withholding obligation and will be filing Forms 1042 and Forms 1042-S with the Internal Revenue Service, it will be required to have an EIN. Please see publication 515 (“Withholding of Tax on Nonresident Aliens and Foreign Entities”) for further information about U.S. Withholding requirements. See Pub. 515. An FFI is also required to obtain an EIN when it is a QI, WP, or WT (through the application process to obtain any such status) or when the FFI is a participating FFI that elects to report its U.S. accounts on Forms 1099 under Treas. Reg. §1.1471-4(d)(5).
How does a FFI apply for a EIN if it does not already have one? If a FFI does not have an EIN, it may apply for one using Form SS-4 (“Application for Employer Identification Number”) or the online registration system. See Apply-for-an-Employer-Identification-Number-(EIN)-Onlinefor more information.
Q1. We are a foreign central bank of issue. Will we be subject to FATCA withholding if we do not register? You will generally be exempt from FATCA Registration and withholding if you meet the requirements to be treated as an exempt beneficial owner (e.g. as a foreign central bank of issue described in Treas. Reg. § 1.1471-6(d), as a controlled entity of a foreign government under Treas. Reg. §1.1471-6(b)(2), or as an entity treated as either of the foregoing under an applicable IGA). A withholding agent is not required to withhold on a withholdable payment to the extent that the withholding agent can reliably associate the payment with documentation to determine the portion of the payment that is allocable to an exempt beneficial owner in accordance with the regulations. However, an exempt beneficial owner may be subject to withholding on payments derived from the type of commercial activity described in Treas. Reg. § 1.1471-6(h).
Q2. We are a foreign pension plan. Will we be subject to FATCA withholding if we do not register? You will be exempt from FATCA Registration and withholding if you meet the requirements to be treated as a retirement fund described in Treas. Reg. § 1.1471-6(f), or under an applicable IGA. A withholding agent is not required to withhold on a withholdable payment to the extent that the withholding agent can reliably associate the payment with documentation to determine the portion of the payment that is allocable to an exempt beneficial owner (in this case, a retirement fund) in accordance with the regulations.
Q1. How should an entity seeking the FATCA status of “direct reporting NFFE” (other than a sponsored direct reporting NFFE) register for this status to obtain a GIIN in order to avoid FATCA withholding?
Q2. How should a sponsor of a sponsored direct reporting NFFE register itself for this status and obtain a GIIN?
Q1. Why has my registration been put into “Registration Incomplete”? What can I do?
Q1. How will Certified-Deemed Compliant FFIs, Owner-documented FFIs, or Excepted FFIs certify to U.S. withholding agents that they are not subject to Chapter 4 withholding given that they are not required to register with the IRS? Certified-Deemed Compliant FFIs, Owner-documented FFIs, and Excepted FFIs will demonstrate their Chapter 4 withholding status to U.S. withholding agents by providing a withholding certificate and documentary evidence that complies with the requirements of Treas. Reg. 1.1471-3(d).
Q2. We are an FFI in a non-IGA country. Will we be subject to Chapter 4 withholding if we do not register with the IRS?
Yes, to the extent that you receive withholdable payments and are not subject to an exemption from the registration requirement. Under FATCA, to avoid being withheld upon, FFIs that are not subject to an exemption from the registration requirement must register with the IRS and agree to report to the IRS certain information about their U.S. accounts, including accounts of certain foreign entities with substantial U.S. owners. An FFI that fails to satisfy its applicable registration requirements will generally be subject to 30% withholding on withholdable payments that it receives.
Q4. What happens if an FFI is not registered by May 5th, 2014? As set forth in Announcement 2014-17, released April 2, 2014, to ensure inclusion on the first IRS FFI List (which is expected to first be electronically available on June 2, 2014) prior to the date FATCA withholding goes into effect, an FFI must finalize its registration by May 5, 2014. The regulations generally provide that, in order for withholding not to apply, a withholding agent must obtain an FFI’s GIIN for payments made after June 30, 2014, though it need not confirm that the GIIN appears on the IRS FFI List until 90 days after the FFI provides a withholding certificate or written statement claiming status as a participating FFI or registered deemed-compliant FFI. A special rule, however, provides that a withholding agent does not need to obtain a reporting Model 1 FFI’s GIIN for payments made before January 1, 2015. See Treas. Reg. § 1.1471-3(d)(4)(iv)(A). As a result, while a reporting Model 1 FFI is currently able to register and obtain a GIIN, it will have additional time beyond July 1, 2014, to register and obtain a GIIN in order to ensure that it is included on the IRS FFI list before January 1, 2015. See Announcement 2014-17 for revised FATCA registration deadlines to ensure inclusion on the first FFI List (which is expected to be electronically available on June 2, 2014).
Q5. Are Forms W-8 still required to be renewed by the appropriate beneficial owners?
However, under certain conditions a Form W-8BEN will remain in effect indefinitely until a change of circumstances occurs. To determine the period of validity for Form W-8BEN for purposes of chapter 4, see Treas. Reg. § 1.1471-3(c)(6)(ii). To determine the period of validity for Form W-8BEN for purposes of chapter 3, see Teas. Reg. § 1.1441-1(e)(4)(ii).
Withholding certificates and documentary evidence obtained for chapter 3 or chapter 61 purposes that would otherwise expire on December 31, 2013, will not expire before January 1, 2015, unless a change in circumstances occurs that would otherwise render the withholding certificate or documentary evidence incorrect or unreliable.
Please note that various Forms in the W-8 series were revised in 2014 to incorporate the certifications required for FATCA purposes and can now be found at the following link: Form & Pubs. See Treas. Reg. § 1.1471-3(c) for rules regarding reliance on a pre-FATCA Form W-8.
This entry was posted on April 24, 2014 at 09:46	and is filed under FATCA. Tagged: FAQs, FATCA, IGA. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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