About FATCA  
  8 FATCA Facts  
  Comment Letters  
  Final Legislation  
  Evolution of FATCA  
  FATCA & MNCs  
  FATCA, U.S. Individuals & Foreign Trusts  
  Client Letters  
  BSM & CTI Solutions  

Evolution of FATCA

2009 | 2010 | 2011 | 2012 | 2013 | 2014

March 3, 2014  

The IRS releases final versions of Form W-8BEN and W-8ECI, as well as instructions for the Form W-8BEN. The newly finalized forms appear to closely track the drafts released in May and June 2013, but require individuals to provide a date of birth even if a foreign taxpayer identification number is provided, as foreshadowed by the recently released updates to the regulations.

Review Form W-8BEN and instructions
Review Form W-8ECI

February 20, 2014  

IRS has releases two packages of regulations under FATCA totaling 565 pages. First, the "coordination" regulations attempt to bridge existing U.S. tax documentation, withholding and information reporting practices to the new FATCA rules. Second, a package of technical corrections and revisions makes a vast number of changes to the final FATCA regulations (in addition to the updates issued last September in T.D. 9610 and the changes previewed in Notice 2013-69 last October).

Read TD 9657 (Chapter 4 changes).
Read TD 9658 (Chapter 3 and 61 changes).

Read our client letters on these regulations:

February 5, 2014  

Canada signs a Model 1 Reciprocal Intergovernmental Agreement.

Read the Canadian IGA

February 4, 2014  

Hungary signs a Model 1 Reciprocal Intergovernmental Agreement.

Read the Hungarian IGA

January 10, 2014  

Italy signs a Model 1 Reciprocal Intergovernmental Agreement.

Read the Italian IGA

December 26, 2013  

The IRS releases Rev. Proc. 2014-13, containing the final FFI Agreement. The FFI Agreement generally follows the draft published as Notice 2013-69 in October 2013. Changes include updates to cross-references and other changes to conform the FFI Agreement to the regulations, corrections of minor errors, and clarifications.

Read our client letter regarding the FFI Agreement

December 19, 2013  

Bermuda signs a Model 2 FATCA Intergovernmental Agreement.

Read the Bermuda IGA

December 18, 2013  

Netherlands signs a Model 1 Reciprocal FATCA Intergovernmental Agreement, accompanied by a memorandum of understanding.

Read the Dutch IGA
Read the Dutch MOU

December 17, 2013  

The IRS announces that it has finalized the format for automatically exchanging FATCA data with IGA jurisdictions.

Read our client letter regarding the International Data Exchange Service

December 16, 2013  

Malta signs a Model 1 Reciprocal FATCA Intergovernmental Agreement.

Read the Malta IGA

December 13, 2013  

The IRS releases Announcement 2014-1, reminding financial institutions of key dates and updated timing for the final FFI Agreement and the QI, WP and WT agreements.

Read our client letter regarding Announcement 2014-1

December 13, 2013  

The British Crown Dependencies of Guernsey, the Isle of Man and Jersey each sign a Model 1 Reciprocal FATCA Intergovernmental Agreement.

Read the Guernsey IGA
Read the Isle of Man IGA
Read the Jersey IGA

November 29, 2013  

The Cayman Islands signs a Model 1 Nonreciprocal FATCA Intergovernmental Agreement.

Read the Cayman IGA

November 26, 2013  

Costa Rica signs a Model 1 Reciprocal FATCA Intergovernmental Agreement.

Read the Costa Rican IGA

November 14, 2013  

France signs a Model 1 Reciprocal FATCA Intergovernmental Agreement.

Read the French IGA

November 4, 2013  

The U.S. Treasury posts revised Model IGAs and Annexes.

October 29, 2013  

The IRS releases Notice 2013-69, which includes a draft FFI agreement and previews several important changes planned for the next round of FATCA regulations.

Read our client letter about Notice 2013-69.

September 9, 2013  

The IRS publishes "technical corrections" to the final FATCA regulations. While many of the changes are minor, there are a few items that are worth noting.

Read our summary of the important changes.
Read our Tax Notes International article about the corrections package.

August 19, 2013   The U.S. Treasury posts revised Model IGAs and new versions of Annex II.
August 19, 2013   The IRS FATCA Registration Portal opens.
July 12, 2013   The U.S. Treasury posts revised Model IGAs and Annexes.
July 12, 2013  

Just days before the FATCA registration portal is to open, the IRS issues Notice 2013-43, pushing back the portal opening date to August 19, 2013, and delaying many documentation and withholding deadlines by six months.

Read our summary of Notice 2013-43

June 11, 2013  

Japan signs a Model 2 FATCA Intergovernmental Agreement (though the agreement is called a "Statement" rather than an agreement).

Read the Japanese IGA

May 31, 2013  

The United Kingdom releases additional FATCA Guidance notes and revised draft regulations. The guidance brings the rules in the U.K. into line with much of the regulations.

Read the Guidance Notes
Read the Draft Regulations

May 31, 2013  

Germany signs a Model 1 Reciprocal FATCA Intergovernmental Agreement.

Read the German IGA
Read the German Declaration of Understanding

May 28, 2013   The U.S. Treasury posts revised versions of Annex II to the IGAs.
May 14, 2013  

Spain signs a Model 1 Reciprocal FATCA Intergovernmental Agreement.

Read the Spanish IGA

May 9, 2013   The U.S. Treasury posts revised Model IGAs and Annexes.
April 15, 2013  

Norway signs a Model 1 Reciprocal FATCA Intergovernmental Agreement.

Read the Norwegian IGA
Read the Norwegian Memorandum of Understanding

February 14, 2013  

Switzerland signs the first Model 2 FATCA Intergovernmental Agreement.

Read the Swiss IGA
Read the Swiss Memorandum of Understanding

January 17, 2013  

The IRS releases final regulations under FATCA (officially published January 28). The regulations consist of 544 pages of explanatory preamble and operative rules. Still to come are numerous additional items, such as the FFI agreement, details about the FFI registration portal, and revised Forms W-8 to identify account holders.

Read the final regulations
Read our client letter regarding the final regulations

December 21, 2012  

Ireland signs a Model 1 Reciprocal FATCA Intergovernmental Agreement.

Read the Ireland IGA and the Irish government statement

December 18,2012  

The United Kingdom issues draft FATCA regulations and guidance notes under its IGA with the United States. While the draft regulations are a fairly straightforward translation of the US-UK IGA into British regulatory form (with the addition of anti-avoidance and penalty provisions), the draft guidance notes contain much more insight into how HMRC expects FATCA to be implemented. The UK also releases a summary of responses to its public consultation and a "frequently asked questions" document regarding privacy issues.

Read our client letter regarding the UK draft guidance.
Read the UK draft regulations, draft guidance notes, summary of consultation responses , and Privacy FAQs.

December 5, 2012  

Treasury informally clarifies a press report about changes to the grandfathering rules that will appear in the final regulations. These changes go even beyond what Announcement 2012-42 provided.

First, the general grandfathering rule sunset date will be extended to December 31, 2013. In other words, the December 31, 2012, date in the proposed regulations will become December 31, 2013, in the final regulations. Accordingly, all definite-tenure obligations entered into in 2013 will be grandfathered.

Second, the rule in Announcement 2012-42 with respect to collateral posted to secure obligations under notional principal contracts ("NPCs") will be extended to all transactions (not just NPCs) where collateral is posted. Therefore, if the secured obligation is entered into before the end of 2013, payments with respect to the collateral would be grandfathered, even if the collateral is an obligation entered into or materially modified after 2013. Collateral substituted after 2013 would fall into this category.

Third, in the "opposite" case where the secured obligation is entered into after 2013 (and therefore is not grandfathered) but the collateral is a grandfathered obligation, payments with respect to the collateral itself will still be grandfathered because of the status of the collateral. The non-grandfathered status of the secured obligation is not relevant. The special rule for collateral is intended to extend grandfathering relief —not carve back the grandfathering rule for the collateral itself.

Treasury chooses not to make a formal announcement of these changes.

November 19, 2012  

Mexico signs a Model 1 Reciprocal FATCA Intergovernmental Agreement. It is the first agreement to go into effect without the need for ratification by the other government. The effective date is January 1, 2013.

Read the Mexican IGA

November 19, 2012  

Denmark announces it has signed a FATCA IGA. The agreement is similar to the United Kingdom IGA and is also a Model 1 reciprocal agreement. The Danish agreement is accompanied by a Memorandum of Understanding ("MOU") that reporting with respect to securities registered with the Danish Central Securities Depository ("DCSD") should be done by the custodians who hold the securities on behalf of customers, and not the DCSD (although the DCSD may do that reporting on behalf of the custodians if it wishes to do so). This is the first instance of a memorandum of understanding to accompany an IGA.

Read the Danish IGA and the MOU

November 14, 2012  

Treasury releases Model 2 of the FATCA IGA. Model 2 requires that financial institutions report directly to the IRS, rather than their home countries as required by Model 1. While Model 2 is largely consistent with Model 1 and the IGA concluded with the United Kingdom, it contains a number of novel features, particularly for collective investment vehicles. Treasury also puts revised Model 1 agreements on its website, but makes no public announcement about the update. The update to Model 1 reflects most of the new features found in Model 2.

Read the Model 2 IGA
Read our client letter regarding Model 2

Read the revised Model 1 Reciprocal Agreement
Read the revised Model 1 Nonreciprocal Agreement
November 8, 2012  

The U.S. Treasury announces that more than 50 countries are in discussions regarding IGAs. Only 17 are expected to have signed IGAs by the end of 2012, however.

See the Treasury press release
Read our client letter
October 24, 2012  

The IRS publishes Announcement 2012-42, which postpones most of the deadlines under the proposed FATCA regulations, bringing those dates into line with the dates in the FATCA intergovernmental agreements (“IGAs”).  U.S. financial institutions, participating foreign financial institutions and reporting financial institutions in IGA countries now all must have new account procedures in place by January 1, 2014, must review preexisting high-value individual accounts by December 31 , 2014, and must review other preexisting accounts by December 31, 2015. The announcement also previews important guidance regarding how the grandfathering rules work for foreign passthru payments, derivatives and collateral.

Read our client letter on Announcement 2012-42
See Announcement 2012-42

September 14, 2012  

The first signed FATCA Intergovernmental Agreement ("IGA") is announced with the United Kingdom. The agreement generally follows the reciprocal Model 1 agreement published on July 26. The UK IGA incorporate several new articles and the first example of a completed Annex II, listing entities and products that are exempt from FATCA.

Read our client letter on the UK IGA
See the UK IGA
See the HMRC consultation document on the UK IGA
August 18, 2012  

The IRS releases a draft Form W-8EXP. Little of substance is changed on the form, but it incorporates the "checkbox" approach to capacity first seen on the draft Form W-8ECI.

See the draft Form W-8EXP
August 16, 2012  

The IRS releases a draft revised Form W-8ECI. The most noticeable feature of the new ECI form is the elimination of the line for the signer's "capacity," which often caused arguments on audit over whether a particular title was sufficient. In place of the capacity line is a simple checkbox where the signer certifies that he or she has the capacity to sign the form.

See the draft Form W-8ECI
Read our client letter on the changes to Forms W-8ECI and IMY
August 14, 2012  

The IRS releases a draft revised Form W-8IMY. Although the draft is roughly what we expected, the IMY form includes a number of new features and as-yet unexplained items – and no instructions.

See the draft Form W-8IMY
Read our client letter on the changes to Forms W-8IMY and ECI
July 26, 2012  

The United States and five other countries release two versions of the "Model 1" intergovernmental agreement ("IGA") under FATCA. The purpose of the IGA is to ease conflicts between local laws and FATCA. Model 1 is expected to be used for IGAs with France, Germany, Italy, Spain, and the United Kingdom. Other countries also might sign on to this model. One version of Model 1 calls for reciprocal information exchange between the U.S. and the partner country; the other version is non-reciprocal, requiring only that the partner country share information with the United States.

Read our client letter on the Model 1 IGA
Read the reciprocal version of Model 1
Read the nonreciprocal version of Model 1
June 6, 2012  

The IRS releases two unofficial drafts of forms to replace the current Form W–8BEN once FATCA goes into effect – concrete evidence of how dramatically the client onboarding process will change under FATCA. Both forms would be used to certify that the recipient of a payment of income is a non-U.S. person who is the beneficial owner of the payment. One of the forms is a slimmed-down Form W–8BEN designed solely for individuals. The other is new Form W–8BEN–E for entities.

Read our client letter about the draft forms
See the draft Form W–8BEN for individuals
See the draft Form W–8BEN–E for entities
May 15, 2012  

The IRS holds a hearing on the proposed FATCA regulations. Twenty speakers give testimony to a mostly silent panel of IRS and Treasury personnel. The implementation timeline and proposed FATCA partnership agreements are among the most common themes in the testimony.

Read our client letter about the hearing
See comment letters and testimony submitted to the IRS and Treasury
February 8, 2012  

The IRS releases nearly 400 pages of proposed regulations under FATCA. The proposed regulations follow up on guidance previously issued in Notice's 2010-60, 2011-34 and 2011-53. IRS also releases joint statement indicating that it is pursuing FATCA partnerships with France, Germany, Italy, Spain and the United Kingdom. FATCA partnerships will help reduce or avoid local law restrictions on a foreign financial institution's ability to comply with FATCA.

Read our client letter regarding the proposed regulations
Read the proposed regulations
Read our client letter regarding the FATCA partnership agreements
Read the joint statement regarding FATCA partnerships
January 19, 2012  

The IRS releases temporary and proposed regulations under IRC § 871(m) concerning “dividend equivalent” payments. Payments under “specified notional principal contracts” (“SNPCs”) that are tied to U.S. source dividends are subject to U.S. tax and withholding. The temporary regulations maintain the status quo in the statute, which otherwise would have expired on March 18, 2012, through the end of 2012. The proposed regulations list seven new or modified types of SNPCs starting in 2013, and also provide that similar payments under other “equity-linked instruments,” such as futures and forward contracts, are subject to the same rules.

Read our client letter regarding the temporary and proposed regulations
Read the temporary regulations under IRC § 871(m)
Read the proposed regulations under IRC § 871(m)
July 25, 2011  

The IRS issues a revised Notice 2011-53 which includes a delay in withholding on NFFEs. The original notice referred only to withholding on FFIs.

Read the revised version of Notice 2011-53
Read a redlined version comparing the original and revised versions of Notice 2011-53
July 15, 2011   The IRS releases Notice 2011-53, which describes the timeline for the implementation of Chapter 4 and discusses certain substantive and procedural matters that will be addressed in regulations issued by Treasury and the IRS. The new dates affect when FFI agreements go into effect, when withholding starts, and account due diligence deadlines.

See the revised dates and timeline under Notice 2011-53
Read the original text of Notice 2011-53
April 8, 2011   The IRS publishes Notice 2011-34, which follows up on Notice 2010-60. The notice contains important provisions regarding passthru payments and the procedures for checking existing individual account.

Read Notice 2011-34
Read our client letter on Notice 2011-34
August 27, 2010   The IRS issues Notice 2010-60, its first round of published guidance concerning foreign financial institutions and non-financial foreign entities.

Read Notice 2010-60
Read our client letter on Notice 2010-60
May 20, 2010   The IRS issues Notice 2010-46, “Prevention of Over-Withholding and U.S. Tax Avoidance with Respect to Certain Substitute Dividend Payments,” to address provisions in IRC § 871(l) included in HIRE. The notice modifies Notice 97-66 on an interim basis and revokes it entirely effective September 14, 2010. The notice states that regulations will be issued generally providing withholding relief for securities lending transactions conducted through a “Qualified Securities Lender” (“QSL”) subject to IRS or QI audit. Transactions not conducted through a QSL would be subject to a more cumbersome “credit forward” system to allow relief for withholding earlier in a chain of securities lending transactions.

Read Notice 2010-46
Read our client letter on Notice 2010-46
April 7, 2010   The IRS issues Announcement 2010-22, requesting comments regarding “guidance projects and issues concerning the interpretation and implementation” of FATCA.

Read Announcement 2010-22.
March 18, 2010   President Obama signs HIRE into law.

Read the FATCA provisions of HIRE as enacted
March 17, 2010   The Senate concurs with the House amendment and sends HIRE to the president.
March 4, 2010   The House agrees to the Senate FATCA language and passes HIRE, but with amendments to other parts of the bill. The bill goes back to the Senate.
February 24, 2010   The Hiring Incentives to Restore Employment (“HIRE”) Act passes the Senate, incorporating and further refining the provisions that originated in FATCA. HIRE gives the IRS more discretion to define what kind of information is required from FFIs and what constitutes a “financial account” that may be subject to the disclosure rules.

Read the FATCA provisions of HIRE
Compare the FATCA language in HIRE with the FATCA language in Extenders
Compare the FATCA language in HIRE with the original FATCA text
Read excerpts of the JCT Report on HIRE
February 1, 2010   The Obama Administration releases its 2011 Green Book. It includes proposals that mirror FATCA, signaling that the Administration is abandoning the proposals in its previous Green Book and endorsing FATCA.

Read excerpts from the 2011 Green Book
December 9, 2009   The Tax Extenders Act of 2009 (“Extenders”), which includes the provisions that originated in FATCA, passes the House of Representatives. Extenders makes numerous small but significant changes to FATCA, including changing the effective date to the beginning of 2013, broadening the ability of IRS regulation writers to exempt certain kinds of payments and entities, and introducing the idea of a “recalcitrant account holder,” an account holder who  refuses to cooperate with requests for information. Withholdable payments by an FFI to a recalcitrant account holder are subject to 30% withholding, and the FFI can elect to push the withholding obligation upstream to a withholding agent from whom it receives the withholdable payment.

Read the FATCA provisions of Extenders
Compare Extenders with FATCA
Read excerpts of the JCT Report on the FATCA language included in Extenders
October 27, 2009   The Foreign Account Tax Compliance Act (“FATCA”) is introduced simultaneously in the House (H.R. 3933) and Senate (S. 1934). Taking a very different approach from the Green Book, FATCA introduces a new 30% withholding tax on “foreign financial institutions” (“FFIs”) and “nonfinancial foreign entities” (“NFFEs”) as a way to force the disclosure to the IRS of U.S. account holders and investors. Taking a cue from the QI program, FATCA requires FFIs to enter into an agreement with the IRS to disclose their U.S. account holders and follow due diligence rules to avoid the 30% withholding tax. NFFEs are required to disclose any U.S. owners with a greater than 10% interest or they, too, will suffer 30% withholding. Withholding applies to “withholdable payments,” defined as U.S. source income and gross proceeds from the sale of securities that could generate U.S. source income. FATCA’s original effective date is January 1, 2011.

Read the original text of FATCA
Read the JCT Report on FATCA
May 11, 2009   The Obama Administration releases its first “Green Book” containing budget proposals for 2010. The Green Book proposes a number of measures to combat tax evasion by wealthy U.S. investors who operate through non-U.S. financial institutions and investment structures. One proposal would require qualified intermediaries (“QI”) to be treated as U.S. payors for Form 1099 purposes, greatly expanding their tax reporting obligations. To drive investors toward QIs, another proposal would require 30% withholding on all payments of U.S. source income paid to nonqualified intermediaries (“NQIs”). NQIs in non-treaty jurisdictions would be subjected to a further 20% withholding tax on gross proceeds from the sales of securities.

Read excerpts from the 2010 Green Book
Read the Joint Committee on Taxation (“JCT”) report on the 2010 Green Book cross-border proposals

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