On July 12, 2013, the IRS, in Notice 2013-43, and the Department of the Treasury in a Press Release of the same date, extended the implementation dates by six months for many of the withholding and account due diligence requirements under Internal Revenue Code sections 1471-1474, commonly referred to as the Foreign Account Tax Compliance Act (FATCA). Treasury and the IRS intend to amend the regulations under sections 1471-1474 to implement the extensions. According to the Treasury Press Release, the extensions should allow more time for foreign jurisdictions to enter into intergovernmental agreements (IGAs) with the United States before FATCA comes into effect and should provide foreign financial institutions (FFIs) with more time to comply with the complex requirements of FATCA. Prior to the issuance of the amended regulations, taxpayers may rely on Notice 2013-43.

The Notice additionally provides that:

  • The 6-month extension does not affect the existing 2017 effective date for withholding on gross proceeds, foreign pass-thru payments, and payments of U.S. source FDAP income with respect to offshore obligations by persons not acting in an intermediary capacity.
  • The IRS “FATCA portal” will open on August 19, 2013.
    • The trial period for FFIs to use the portal will extend from August 19, 2013, to January 1, 2014.
    • Global Intermediary Identification Numbers (GIINs) will not be issued until 2014.
  • Grandfathered treatment for obligations is extended to those in effect on July 1, 2014.
    • An account that is opened on or before June 30, 2014, will be considered a grandfathered obligation and will not be subject to FATCA withholding requirements for the term of the obligation unless there is a material modification to the obligation.
  • Reporting on U.S. accounts for 2013 is eliminated.
  • Treasury will maintain on its website a list of IGAs that will be treated as in effect for FATCA purposes, even if they are not officially in effect.

As a result of these extensions, a withholding agent will not be required to withhold on a withholdable payment and should not be subject to any Chapter 4 reporting with respect to withholdable payments until after June 30, 2014. New account opening procedures will not need to be implemented until July 1, 2014, and FFIs can finalize their FATCA registration by April 25, 2014, and still be included on the very first FFI list, which now will be published on June 2, 2014.

Full details of the 6 month extension for FATCA are as follows:

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