Scribd Logo
Upload

Welcome to Scribd!

  • Comparison of FATCA With IGA Model 1 & Model 2

    Uploaded by

    Vitalii Liakh
    162 views4 pages
    The document compares key aspects of FATCA regulations, Model 1 IGA, and Model 2 IGA. Some key differences include: - Under FATCA, FFI agreements and registration with the IRS are required for all FFIs, while under Model 1 and 2 IGAs this is only required for resident FFIs. - Model 1 and 2 IGAs allow for resolution of conflicts of laws to permit reporting and withholding, while FATCA does not address this. - Withholding under FATCA generally applies more broadly to non-participating FFIs and account holders, while Model 1 and 2 IGAs limit withholding to cases of significant non-compliance. - Model 1 IGAs provide for

    Original Description:

    Original Title

    Comparison of FATCA with IGA Model 1 & Model 2

    Copyright

    © © All Rights Reserved

    Available Formats

    PPTX, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    Report this Document
    The document compares key aspects of FATCA regulations, Model 1 IGA, and Model 2 IGA. Some key differences include: - Under FATCA, FFI agreements and registration with the IRS are required for all FFIs, while under Model 1 and 2 IGAs this is only required for resident FFIs. - Model 1 and 2 IGAs allow for resolution of conflicts of laws to permit reporting and withholding, while FATCA does not address this. - Withholding under FATCA generally applies more broadly to non-participating FFIs and account holders, while Model 1 and 2 IGAs limit withholding to cases of significant non-compliance. - Model 1 IGAs provide for

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as pptx, pdf, or txt
    162 views4 pages

    Comparison of FATCA With IGA Model 1 & Model 2

    Uploaded by

    Vitalii Liakh
    The document compares key aspects of FATCA regulations, Model 1 IGA, and Model 2 IGA. Some key differences include: - Under FATCA, FFI agreements and registration with the IRS are required for all FFIs, while under Model 1 and 2 IGAs this is only required for resident FFIs. - Model 1 and 2 IGAs allow for resolution of conflicts of laws to permit reporting and withholding, while FATCA does not address this. - Withholding under FATCA generally applies more broadly to non-participating FFIs and account holders, while Model 1 and 2 IGAs limit withholding to cases of significant non-compliance. - Model 1 IGAs provide for

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as pptx, pdf, or txt
    of 4

    Comparison of FATCA vs IGA Model 1 & Model 2

    Issue FATCA Regulations Model 1 IGA Model 2 IGA


    FFI agreement Subject to specified exceptions, Not required for resident FFIs. Resident FFIs must agree to
    all FFIs must enter into an FFI comply with the requirements of
    Agreement to avoid withholding. an FFI Agreement. Article 2(a).
    Requirement to withhold, on
    payments to FFIs, see Reg.
    §1.1471-2(a).
    FFI Agreement described, Reg.
    §1.1471-4.
    Amendment of agreement Unknown. Intended prior to December 31, Expected to be the same as
    2016. Article 10. Model 1.
    Registration with IRS Required. Reg. §1.1471-4(a). Required. See, e.g., HMRC Required. Article 2(1)(a).
    Guidance Notes, Section 2.1.
    Enforcement of compliance Internal compliance program; Local/IRS. Article 5. Local/IRS. Article 4.
    certifications; IRS. Reg. §1.1471-
    4(f).
    Significant non-compliance Rules provided to cure event of Must be resolved within 18 Must be resolved within 12
    default. Reg. §1.1471-4(g). months. Article 5(2)(b). months. Article 4(2).
    Deemed-compliant/exempt Reg. §§1.1471-5(e)(5), -5(f), -6; Annex I(VI)(B)(4), and Annex II Annex I(VI)(B)(4), and Annex II
    entities Reg. §1.1472-1(c). (by mutual Agreement). (by mutual Agreement).
    Can resident FFIs be non- Yes Limited to cases of unresolved Limited to cases of unresolved
    participating FFIs? significant non-compliance. significant non-compliance.
    Article 5(2)(b). Article 4(2).
    Due diligence requirements Reg. §1.1471-4(c). Annex I Annex I
    Election to follow due diligence N/A Yes. Annex I(I)(C). Yes. Binding subject to material
    provisions of the regulations modification rule. Annex I(I)(C).
    rather than Annex I
    Issue FATCA Regulations Model 1 IGA Model 2 IGA
    Permitted to open undocumented Yes, but subject to a limited No, except for de minimis No, except for de minimis
    individual accounts cure period. Reg. §1.1471-5(g) accounts. Annex I(III)(B). accounts. Annex I(III)(B).
    (ii).
    Permitted to open undocumented Yes, but subject to a limited No; however, self-certification No; however, self-certification
    entity accounts cure period. Reg. §1.1471-4(c) may not be required. Annex I(V) may not be required. Annex I(V)
    (3)(ii). (B), (C). (B), (C).
    Required closing of recalcitrant Yes, as specified. Reg. No. Article 4(2). No. Article 4(2)(a).
    account holders §1.1471-4(i). Required
    reduction. Reg. §1.1471-4(g)
    (1)(ii).
    Required to provide financial Limited to certain deemed- Limited to small financial Limited to small financial
    services to specified U.S. compliant FFIs. institutions with a local client institutions with a local client
    persons Reg. §1.1471-5(f)(1)(i)(A). base. Annex II. base. Annex II.
    Resolution of conflicts of law to No Yes Yes
    permit reporting
    Reporting of information to local IRS, Form 8966: U.S. Local Authority, Article 2. IRS, Article 2.
    authority or IRS accounts, Reg. §1.1471-4(d)
    (3)(vii); recalcitrant, Reg.
    §1.1471-4(d)(6)(v).
    Information reporting Provided in Reg. §1.1471-4(d). Specified in agreement. Article Based upon regulations. Article
    requirements 2. 2.
    Reporting of U.S. accounts Waiver required from each Automatic for reportable U.S. Consent to report required from
    U.S. account, if reporting is accounts. Article 2(1). each US Account. Article 2(1).
    prevented under foreign law.
    Reg. §1.1471-4(i)(2).
    Reporting of recalcitrant Reg. §1.1471-4(d)(6). Automatic for reportable U.S. Treated as U.S.
    accountholders accounts. Article 2(1). accountholders, total number
    and value to be reported, and
    subject to group request by U.S.
    Article 2(2).
    Issue FATCA Regulations Model 1 IGA Model 2 IGA
    U.S. reciprocity No Yes* Reciprocal agreement Optional
    only.
    Resolution of conflicts of law No Yes. See, e.g., Article 4(1)(d). Yes. See, e.g., Article 3(2)(b).
    to permit withholding
    Withholding on resident FFIs Yes, withholding applies to any No, except in cases of No, except in cases of
    non-participating FFI. Reg. unresolved significant non- unresolved significant non-
    §1.1471-4(b). compliance. Article 4. compliance. Article 3(1).
    Withholding on nonresident, Yes, withholding applies to any Yes. Article 4(1). Yes, subject to the withholding
    non-participating FFIs non-participating FFI. Reg. requirements of the regulations.
    §1.1471-4(b). Article 2(1)(a).
    Withholding on foreign Yes, 2017 at the earliest. Reg. No. Article 4. No. Article 3.
    passthru payments and gross §1.1471-4(b)(4).
    sales proceeds
    Withholding on U.S.-source Yes, begins in 2014, Reg. No. Article 4. No. Article 3.
    FDAP §1.1471-4(b).
    Withholding on recalcitrant Yes. Reg. §1.1471-4(b). No. Article 4(2). No. Article 3(2).
    account holders

    You might also like