Q&A: The US FATCA regulations have finally landed

On 17 January 2013 the US Treasury Department issued the long awaited Foreign Account Tax Compliance Act (FATCA) Regulations (‘the regulations’; available via www.lexisurl.com/fatcaregs). FATCA will impact every financial institution wherever based.

The regulations

• detail the operational aspects of implementing FATCA;
• reduce administrative burdens; and
• clarify the interaction of the unilateral regulatory regime with the bilateral intergovernmental (IGA) regime.

The headline changes

• Withholding: grandfathered date extended for obligations outstanding on 1 January 2014 and for gross proceeds and foreign passthru payments occurring before 1 January 2017.
• Covered FFIs: non-professionally managed passive entities now are non-financial foreign entities (NFFEs) not foreign financial institutions (FFIs); scope of...