IRS Launches FATCA Data System
In late November, the US IRS announced that the Foreign Account Tax Compliance Act (FATCA) International Data Exchange Service (IDES) would be opening for testing in December.
FATCA, which was enacted by the US Congress in 2010 and took effect on July 1, 2014, is intended to ensure that the IRS obtains information on financial accounts held at foreign financial institutions (FFIs) by US persons. Failure by an FFI to disclose information on their US clients will result in a requirement to withhold 30 percent tax on payments of US-sourced income.
US persons are also required to report, depending on the value, their foreign financial accounts and foreign assets.
The FATCA IDES is an electronic delivery point where financial institutions and host country tax authorities can securely transmit and exchange FATCA data with the United States. The data is in a standard XML schema format.
According to the IRS, the portal will be open for taxpayers to use on a voluntary basis from Monday, December 16, 2019, at 8:00 AM EST to Friday, January 24, 2020, at 5:00 PM EST.
For more information on this, and other topical international tax matters, please visit: https://www.cchgroup.com/roles/corporations/international-solutions/research/global-tax-weekly-a-closer-look