IRS Offers FATCA Relief, Extending Registration Deadline And Expanding Intergovernmental Agreement List

On April 2, 2014, the U.S. Internal Revenue Service (IRS) issued Announcement 2014-17 (the Announcement), which provides certain FATCA relief.1 The Announcement extends from April 25, 2014 to May 5, 2014 the deadline by which an FFI must register with the IRS in order to appear on the first public list of "Global Intermediary Identification Numbers" (GIINs) maintained by the IRS, also known as the "FFI List." A GIIN is an identification number that will be assigned by the IRS to an FFI upon registration. The Announcement also expands the list of jurisdictions with intergovernmental agreements (IGAs) considered effective (Effective IGA List) by including jurisdictions with IGAs that have been agreed in substance, even if an IGA has not yet been signed.

Extension of First Registration Deadline

Treasury Regulations under FATCA generally provide that, in order for withholding under FATCA not to apply for certain payments made after June 30, 2014, a withholding agent must obtain a GIIN and confirm that the GIIN appears on the FFI List.2 Prior guidance from the IRS indicated that an FFI had to register with the IRS by April 25, 2014 in order to ensure inclusion on the first FFI List.3

Under the Announcement, the deadline by which an FFI must register in order to appear on the first FFI List (to be published on June 2, 2014) is extended to May 5, 2014. Further, FFIs that register by June 3, 2014 will be included on the second FFI List to be published on July 1, 2014.

The Announcement points out that FFIs finalizing registration after these dates may still be included on the first or second FFI Lists, as applicable, but the IRS cannot provide assurance that this will be the case.

Expansion of Effective IGA List

In order to register for a GIIN for an FFI that is subject to an IGA, the IGA must be effective as of the registration date. With the first registration deadline approaching, concern had arisen that entities in jurisdictions engaged in discussions with the United States regarding IGAs, but which had not yet signed IGAs, would face uncertainty regarding their status for registration purposes. In order to address this concern, the Announcement provides that a jurisdiction that, prior to July 1, 2014, has reached an agreement in substance with the United States on the terms of an IGA and has consented to be included on the list will be included on the Effective IGA List, even if that IGA has not yet been signed.4

These jurisdictions will be...