For those participating in FATCA, the FATCA regulations and the particular jurisdiction’s Intergovernmental Agreement (IGA) implementing regulations require certain Foreign Financial Institutions (FFIs or FIs) to register in the U.S. Internal Revenue Service (IRS) FATCA portal. An important aspect of registering an FI in the IRS FATCA portal is obtaining a Global Intermediary Identification Number (GIIN). Upon registration approval, the IRS will issue the FI a GIIN and includ

A Global Intermediary Identification Number (GIIN) is the identification number that the IRS assigns to certain foreign financial institutions (FFI), branch of a financial institution (FI), direct reporting non-financial foreign entity (NFFE), sponsoring entity, certain sponsored entities, and sponsored subsidiary branch once the entity’s FATCA registration has been approved. The GIIN serves the purpose of identifying the registered entity to withholding agents and tax admini

Timing is everything in life and timing counts in obtaining a GIIN for FATCA. Poor timing can impact opening a bank account, submitting annual FATCA reporting, and more. What Is a GIIN? A Global Intermediary Identification Number (GIIN) is the identification number that the IRS assigns to an FI once the entity’s FATCA registration in the IRS FATCA portal has been approved. The GIIN serves the purpose of identifying the registered entity to withholding agents and tax administr

You registered your Financial Institution in the U.S. Internal Revenue Service (IRS) FATCA portal. You received a Global Intermediary Identification Number (GIIN). At some future date, you receive a random email from the IRS with the title “Your FATCA account update” or something similar. You open the email and the email from the IRS states: “You have a new message on your Foreign Account Tax Compliance Act (FATCA) message board. You must log into your FATCA account ending in

Foreign Financial Institutions (FFIs) participating in FATCA through an IGA or as a Participating FFI are required to undertake annual FATCA reporting on certain U.S. Persons. The FFI documents U.S. Persons by obtaining a U.S. Internal Revenue Service (IRS) Form W-9 or substitute Form W-9 from its customer. However, some U.S. Persons are exempt from being reported and may use the Form W-9 to document their exemption. Line 4 Line 4 of the Form W-9 is where a U.S. Person may li

In many jurisdictions such as the U.S., there are laws dictating when a financial institution must consider a customer’s financial account to be dormant. Each state in the U.S. has laws that govern when accounts are considered inactive and/or abandoned. However, what if you are applying FATCA in a jurisdiction without such clear laws or regulations? FATCA Regulations FATCA regulations provide tiered guidance in defining a dormant account for accounts that are not a cash value

As part of a Financial Institution’s (FI’s) FATCA obligations, an FI must conduct due diligence that includes collecting a non-U.S. Person account holder’s tax identification number (TIN). But what if the account holder’s tax residence jurisdiction does not issue TINs? Must you declare the withholding certificate invalid? Not necessarily. The U.S. Internal Revenue Service (IRS) provides exceptions to obtaining foreign TINs for certain categories of account holders. An FI is n

FATCA requires U.S. Financial Institutions (USFIs) to withhold 30 percent on U.S. Source Withholdable Payments made to Foreign Financial Institutions (FFIs). When is this enforcement stick applicable? What Is a Withholdable Payment? The term “U.S. Source Withholdable Payment” means payments of interest (including any original issue discount), dividends, rents, salaries, wages, premiums, annuities, compensations, remunerations, emoluments, and other fixed or determinable annu

To comply with FATCA regulations, each Sponsored Entity must enter into a written agreement with its Sponsoring Entity. The Sponsoring Entity’s Responsible Officer is required to certify to the IRS that this agreement is in place. Sponsored & Sponsoring Entities Defined A Sponsored Foreign Financial Institution (FFI) is an FFI that is an investment entity or a controlled foreign corporation which has a Sponsoring Entity performing FATCA due diligence, withholding, and report

FATCA vocabulary has become second nature to those of us actively working on FATCA-related issues. However, clients and newcomers to the world of FATCA may not have a complete understanding of the lexicon. Certain terms are of critical importance especially the words “Responsible Officer” which is frequently abbreviated as “RO”. What Is a “Responsible Officer”? An RO is the individual in charge of overseeing a Participating Foreign Financial Institution’s (PFFI’s) complianc