Source: https://profwilliambyrnes.com/2014/05/13/new-fatca-faq-on-trustee-registration-brings-total-to-15-new-this-past-month/
Timestamp: 2019-04-19 02:31:41+00:00

Document:
On May 13, 2014 the IRS has released a new FATCA FAQ: How do Trustees of Trustee-Documented Trusts register? This FAQ adds to the 10 new ones included April 24th and the 4 added May 2nd. See below for the date-annotated FAQs by topic, followed by the date-annotated by question. Link within this Blog for my other analysis of FATCA updates.
Q2 How do FIs that are currently QIs, WPs and WTs renew their agreements? Existing QIs, WPs and WTs are required to renew their QI agreements through the FATCA registration website as part of their FATCA registration process.All QI, WP, or WT agreements that would otherwise expire on December 31, 2013 will be automatically extended until June 30, 2014. (Notice 2013-43; 2013-31 IRB 113).
New York City, New York 10007Note: Form 14345 (“QI Intermediary Application”) should be used for WPs and WTs in addition to QIs.
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? (see >April 24< update) 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? (see >April 24< update) 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).
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. See FATCA – Archive for a list of countries treated as having an IGA in effect.A Limited FFI means an FFI that, due to local law restrictions, cannot comply with the terms of an FFI Agreement, or otherwise be treated as a PFFI or RDCFFI, and that is agreeing to satisfy certain obligations for its treatment as a Limited FFI.
Q5 In a Model 1 IGA jurisdiction, does the FFI need to fill out Question 10 about Responsible Officers? (see >April 24< update) 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.
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? (see >April 24< update) 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? (see >April 24< update) 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? The Sponsoring Entity that agrees to perform the due diligence, withholding, and reporting obligations of one or more Sponsored Entities pursuant to Treas. Reg. §1.1471-5(f)(1)(i)(F) should register with the IRS via the FATCA registration website to be treated as a Sponsoring Entity. To allow a Sponsoring Entity to register its Sponsored Entities with the IRS, and, as previewed in Notice 2013-69, the IRS is developing a streamlined process for Sponsoring Entities to register Sponsored Entities on the FATCA registration website. Additional information about this process will be provided by the IRS at a later date.While a Sponsoring Entity is required to register its Sponsored Entities for those entities to obtain GIINs, the temporary and proposed regulations provide a transitional rule that, for payments prior to January 1, 2016, permit a Sponsored Entity to provide the GIIN of its Sponsoring Entity on withholding certificates if it has not yet obtained a GIIN. Thus, a Sponsored Entity does not need to provide its own GIIN until January 1, 2016 and is not required to register before that date.
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.
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? Yes, the FI or direct reporting NFFE may employ an outside organization to assist with FATCA registration and discontinue the relationship with the outside organization once registration is complete. As part of the registration process, an FI or direct reporting NFFE may appoint up to five POCs who are authorized to take certain FATCA-related actions on behalf of the entity, including the ability to complete all parts of the FATCA Registration (except for Part 4), to take other appropriate or helpful FATCA-related actions, and to obtain access to the entity’s FATCA-related tax information. The POC authorization must be made by an RO within the meaning of Part 1, question 10. Part 4 must be completed by the RO or a duly authorized agent of the RO. (See FAQ 1 for a discussion of the process for delegating authorization to complete Part 4.)Once the services of a POC are no longer needed, the RO may log into the online FATCA account and delete the POC. This process revokes the POC’s authorization. At this point, the Responsible Officer can input a new POC, or leave this field blank if they no longer wish to have any POC other than the RO listed on Line 10.If a third-party adviser that is an entity is retained to help the FI or direct reporting NFFE complete its FATCA registration process, the name of the third-party individual adviser that will help complete the FATCA registration process should be entered as a POC in Part 1, question 11b, and the “Business Title” field for that individual POC should be completed by inserting the name of the entity and the POC’s affiliation with the entity. For example, suppose that John Smith, Partner of X Law Firm, has been retained and been given the authority to help complete the FATCA Registration on behalf of FI Y. 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.
Q5 For each of the following FATCA classifications (i.e. Participating Foreign Financial Institution “PFFI”, PFFI that elects to be part of a consolidated compliance program, Registered Deemed-Compliant Foreign Financial Institution “RDCFFI”, Reporting Model 1 FFI, Limited FFI and US Financial Institution “USFI”) what type of individual may serve as a Responsible Officer for purposes of Part 1, Question 10 of the FATCA Registration? (see >May 2nd< update) With respect to a PFFI, an RO is an officer of the FFI (or an officer of any Member FI that is a PFFI, Reporting Model 1 FFI or Reporting Model 2 FFI) with sufficient authority to fulfill the duties of a Responsible Officer described in a FFI Agreement.With respect to a PFFI that elects to be part of a consolidated compliance program, an RO is an officer of the Compliance FI with sufficient authority to fulfill the duties of a Responsible Officer described in the FFI Agreement on behalf of each FFI in the compliance group (regardless of whether the FFI is a Limited FFI or treated as a Reporting Model 1 FFI or Reporting Model 2 FFI).With respect to a RDCFFI, other than a RDCFFI that is a Reporting Model 1 FFI, an RO is an officer of the FI (or an officer of any Member FFI that is a PFFI, Reporting Model 1 FFI, or Reporting Model 2 FFI) with sufficient authority to ensure that the FFI meets the applicable requirements to be treated as a RDCFFI.With respect to a Reporting Model 1 FFI, an RO is any individual specified under local law to register and obtain a GIIN on behalf of the FFI. If, however, the Reporting Model 1 FFI operates any branches outside of a Model 1 IGA jurisdiction, then the RO identified must be an individual who can satisfy the requirements under the laws of the Model 1 IGA jurisdiction and the requirements relevant to the registration type selected for each of its non-Model 1 IGA branches.
Q6 (see >May 2nd< update)Part 4 of the online registration system* states:By checking this box, I, _________, [(the responsible officer or delegate thereof (herein collectively referred to as the “RO”)], certify that, to the best of my knowledge, the information submitted above is accurate and complete and I am authorized to agree that the Financial Institution (including its branches, if any) will comply with its FATCA obligations in accordance with the terms and conditions reflected in regulations, intergovernmental agreements, and other administrative guidance to the extent applicable to the Financial Institution based on its status in each jurisdiction in which it operates.*Note: Part 4 of Form 8957 contains a substantially similar certification.
How do the certifications in Part 4 apply to FIs treated as reporting Model 1 FFIs? The first declaration above applies to FIs treated as reporting Model 1 FFIs and, as such, the RO of an FI treated as a reporting Model 1 FFI certifies that, to the best of the RO’s knowledge, the information submitted as part of the FATCA Registration process is accurate and complete. The second declaration, however, has limited applicability to FIs treated as reporting Model 1 FFIs because the FI does not have ongoing FATCA compliance obligations directly with the IRS. Instead, the compliance and reporting obligations of an FI treated as a reporting Model 1 FFI are to its local authority. However, a reporting Model 1 FFI that has branches (as identified in Part 1, line 9 of Form 8957) that are located outside of a Model 1 IGA jurisdiction will also agree to the terms applicable to the statuses of such branches. Additionally, an FI (including an FI in a Model 1 IGA jurisdiction) that is also registering to renew its QI, WP, or WT Agreement will agree to the terms of such renewed QI, WP, or WT Agreements by making the second declaration.
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).
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? A direct reporting NFFE is eligible to register for this status and when registering should complete an online registration (or, alternatively, submit a paper Form 8957) based on the instructions provided in this FAQ. For registrations occurring in years after 2014, it is anticipated that both the online registration user guide and the Instructions for Form 8957 will be updated to incorporate this information.In general, for purposes of completing the registration of a direct reporting NFFE, substitute the words “direct reporting NFFE” for the words “financial institution” wherever they appear in the online registration user guide (or in the Instructions for Form 8957). Unless specific instructions for a registration question are described here in this FAQ, please use the generally applicable instructions provided in the online registration user guide (or in the Instructions for Form 8957).Part 1Question 1 – – Select “Single”.
Q2 How should a sponsor of a sponsored direct reporting NFFE register itself for this status and obtain a GIIN? A sponsor of a sponsored direct reporting NFFE is a sponsoring entity (see Treas. Reg. § 1.1471-1T(b)(124)) and should complete an online registration (or, alternatively, submit a paper Form 8957) as a sponsoring entity, based on the instructions provided in this FAQ. A sponsoring entity need only complete one registration to act as the sponsor for both sponsored FFIs and sponsored direct reporting NFFEs. For registrations occurring in years after 2014, it is anticipated that both the online registration user guide and the Instructions for Form 8957 will be updated to incorporate this information, including by incorporating the definition of sponsoring entity provided in Treas. Reg. § 1.1471-1T(b)(124).In general, for purposes of having a sponsor register a sponsored direct reporting NFFE, substitute the words “sponsor of a direct reporting NFFE” for the words “sponsoring entity” wherever they appear in the online registration user guide (or in the Instructions for Form 8957). Unless specific instructions for a registration question are described here in this FAQ, please use the generally applicable instructions provided in the online registration user guide (or in the Instructions for Form 8957).Part 1Question 1 – – Select “Sponsoring Entity”.
Q3 How do Trustees of Trustee-Documented Trusts register? Trustees needing to register Trustee-Documented Trusts (a certified deemed-compliant status for FFIs under the Model 1 and Model 2 IGAs) should use the same procedures Sponsors use to register Sponsored Entities. The trustee should select “Sponsoring Entity” as its FI Type, and select “None of the above” in Part 1, Question 4. More information on how to register a Sponsoring Entity can be found in the FATCA Registration Online User Guide.Please note that if a trustee is required to register itself based on its own applicable status as an FFI, it will do so on a separate registration, and thus will have two separate GIINs, one for such use and another for use in its capacity as a trustee of a Trustee-Documented Trust.The Trustee-Documented Trust itself will not be registered and does not need to obtain a GIIN.
Q1 How does a disregarded entity (DE) in a Model 1 IGA jurisdiction satisfy its FATCA registration requirements? (see >May 2nd< update) A DE in a Model 1 IGA jurisdiction must register as an entity separate from its owner in order to be treated as a reporting Model 1 FFI, provided that the DE is treated as a separate entity for purposes of its reporting to the applicable Model 1 jurisdiction. Select either a “Single” FFI or “Member” FFI in Part 1, Question 1 of the FATCA Registration (as appropriate). Select “Registered Deemed-Compliant Financial Institution (including a Reporting Financial Institution under a Model 1 IGA)” in Part 1, Question 4. When the owner of the DE registers on its own behalf, it should not report the DE as a branch.
How does a branch in a Model 1 IGA jurisdiction satisfy its FATCA registration requirements? In general, a branch (as defined in Treas. Reg. § 1.1471-4(e)(2)(ii)) should be registered as a branch of its owner and not as a separate entity. Thus, the branch will be registered by the FI of which the branch is a part (including an appropriate Lead FI or Sponsoring Entity) when that FI completes Part 1 of its own FATCA registration. The online registration user guide provides further instructions on how to register branches. In general, a branch is a unit, business, or office of an FFI that is treated as a branch under the regulatory regime of a country or is otherwise regulated under the laws of such country as separate from other offices, units, or branches of the FI.
How does a branch or a disregarded entity (DE) in a jurisdiction that does not have an IGA, or that is in a Model 2 IGA jurisdiction, satisfy its FATCA registration requirements? A branch (including a DE) that is in a Model 2 IGA jurisdiction, or a jurisdiction without an IGA, should be registered as a branch of its owner (rather than as a separate entity). As such, the branch will be registered by the FI of which the branch is a part (including an appropriate Lead FI or Sponsoring Entity) when that FI completes Part 1 of its own FATCA registration. The branch will not have a separate registration account, but will be assigned a separate GIIN, if eligible. When the FI completes its FATCA registration and registers its branches by answering Questions 7, 8, and 9, GIINs will be assigned with respect to the registered branches, where appropriate. The online registration user guide provides further instructions on how to register branches. A separate GIIN will be issued to the FI to identify each jurisdiction where it maintains a branch that is participating or registered deemed-compliant.All branches (and, except in Model 1 IGA jurisdictions, disregarded entities) of an FI located in a single jurisdiction are treated as one branch and, as a result, will share a single GIIN. U.S. branches and limited branches are not eligible to receive their own GIINs. A branch of an FFI located in the FFI’s home country will use the GIIN of the FFI. For example, suppose FI W (located in Country X) has one branch in Country X, two branches in Country Y and owns a DE in Country Z. Country Z is a Model 1 IGA jurisdiction. FI W will receive a Country X GIIN. FI W’s Country X branch will use W’s GIIN. The two branches in Country Y will be treated as a single branch, and so FI W will be issued a single Country Y GIIN for these two branches to share. The Country Z DE will register as an entity separate from its owner, in order to be treated as a reporting Model 1 FFI, and will receive its own GIIN.
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? (see >April 24< update) 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).
Q4 What happens if an FFI is not registered by May 5th, 2014? (see >April 24< update) 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? (see >April 24< update) Generally, a Form W-8BEN will remain in effect for purposes of establishing foreign status for a period starting on the date the form is signed and ending on the last day of the third succeeding calendar year, unless a change in circumstances makes any information on the form incorrect. For example, a Form W-8BEN signed on September 30, 2015, remains valid through December 31, 2018.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 May 13, 2014 at 14:10	and is filed under FATCA. Tagged: FAQ, 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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