The Internal Revenue Service (IRS) of US has launched a new online registration system for financial institutions that need to register with it under the Foreign Account Tax Compliance Act (FATCA).
Banks can now begin the process of registering by creating an account and providing required information.
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Financial institutions will also be able to provide required information for their branches and other members of their expanded affiliate groups in which the financial institution is the lead organization.
The new registration system, which is designed to enable secure account management, is a Web-based application with around-the-clock availability.
Within a secure environment, the registration system enables financial firms to establish online accounts; customize home pages to manage accounts; designate points of contact to handle registrations; oversee member and/or branch information; and receive automatic notifications of status changes.
FATCA requires foreign banks, investment funds and insurance companies to report to the IRS Americans’ offshore accounts worth more than US$50,000.
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By GlobalDataStarting in January 2014, financial institutions will be expected to finalize their registration information by logging into their accounts, making any necessary changes and submitting the information as final.
As registrations are finalized in 2014, financial institutions will receive a notice of registration acceptance and will be issued a global intermediary identification number.
The IRS will electronically post the first IRS Foreign Financial Institution (FFI) List in June 2014, and will update the list monthly. To ensure inclusion in the June 2014 IRS FFI List, financial institutions will need to finalize their registrations by April 25, 2014.
Financial institutions that fail to comply with FATCA face a 30% withholding tax on their US source income.
The IRS will start collecting the firm’s customer account information in 2015.
