The U.S. Internal Revenue Service (IRS) has issued a 10-day extension to the initial April 25th deadline for Foreign Financial Institutions to complete their FATCA registration and receive their Global Intermediary Identification Number (GIIN).
FFIs now have until May 5th to complete FATCA registration on the IRS online portal and still appear on the first list of GIINs, which will be published on June 2, 2014.
The IRS extension is intended to assist FFIs in jurisdictions that have not yet signed an Inter-Governmental Agreement but “have reached an agreement in substance on the terms of an IGA with the clarity they need to comply with FATCA”.
“Despite the 10-day extension, the imperative remains for FFIs to take the first steps towards establishing a FATCA compliance program and thereby avoid the costly legal and financial consequences that will arise from non-compliance,” said DMS Director Alaina Danley. “This announcement simply enhances the registration process for the implementation of FATCA on July 1, 2014.”
FFIs that fail to comply with FATCA risk being listed as non-participating financial institutions and may also be subject to a 30 percent withholding tax.
Points to note:
- Based on the registration process to date, the IRS believes that it can ensure registering FFIs that their GIINs will be included on the June 2 IRS FFI List, if their registrations are finalized by May 5, 2014, rather than April 25, 2014, as originally announced.
- The IRS also believes it can ensure registering FFIs that their GIINs will be included on the July 1 IRS FFI List, if their registrations are finalized by June 3, 2014.
- FFIs that finalize their registrations after May 5 or June 3 may still be included on the June 2 or July 1 IRS FFI List, respectively; however, the IRS cannot provide assurance that this will be the case.
- The IRS will continue processing registrations in the order received; however, processing times may increase as the May 5 and June 3 dates approach.