On July 12, 2013, the Internal Revenue Service (IRS) released Notice 2013-43 (Notice) announcing that the IRS and the Department of Treasury (Treasury) intend to amend final Treasury regulations implementing the U.S. Foreign Account Tax Compliance Act (FATCA). The delay means that multinational employers with U.S. citizens participating in foreign retirement plans will not be required to begin required withholdings until July 1, 2014.
 
FATCA generally imposes a 30% withholding requirement on most interest and dividendspaid by U.S. payors to non-U.S. retirement plans unless such non-U.S. plans are exempt or specifically listed in an Intergovernmental Agreement for the Implementation of FATCA (IGA). FATCA was scheduled to take effect beginning on January 1, 2014. The Notice modifies the implementation date so that U.S. payors will be required to begin the 30% withholdings for all applicable payments after June 30, 2014.
 
Non-U.S. financial institutions are able to register as a foreign financial institution (FFI) and enter into FATCA agreements, exempting account holders from the 30% withholding. However, in order to register and be deemed a compliant FFI, an institution's jurisdiction must first enter into an IGA. The Notice recognizes that the IGA process has not progressed as quickly as hoped. Thus, in addition to jurisdictions that have signed and implemented an IGA, some jurisdictions will be deemed to have implemented an IGA such that FFIs will be allowed to register and be deemed compliant prior to the July 1, 2014 withholding implementation date. However, a jurisdiction may be removed from the list of deemed compliant jurisdictions if the jurisdiction fails to perform the steps necessary to bring the IGA into force within a reasonable period of time.