FATCA: Who Must Report by March 31?
The deadline for a Participating Foreign Financial Institution (PFFI), including a Reporting FI under a Model 2 IGA to complete its FATCA reporting to the IRS is March 31.
Most reporting preparation is focused on Cayman Islands, Luxembourg and other non-U.S. jurisdictions. However, there are also a significant number of FIs who must submit their FATCA reporting directly to the IRS.
Generally, a United States FI (USFI) is not required to obtain a Global Intermediary Identification Number (GIIN) and enter into an FFI Agreement with the IRS. However, some organizations have opted to register certain of their USFIs to act as Leads in an Expanded Affiliated Group (EAG). The USFI registered as a Lead with the IRS must undertake FATCA reporting for itself with the IRS.
Foreign Grantor and Non-Grantor Trusts
Assuming the Foreign Grantor Trust or Foreign Non-Grantor Trust is professionally administered, it will be considered a PFFI under FATCA. It will register for a GIIN and enter into an FFI Agreement with the IRS. The trust will undertake FATCA reporting for itself with the IRS.
If the trust is classified as a Sponsored Closely-Held Investment Vehicle, then its Sponsoring Entity will obtain a GIIN and enter into an FFI Agreement with the IRS. The Sponsoring Entity will undertake the IRS FATCA reporting for its SCHIVs.
Model 2 IGA Jurisdictions
A Reporting Model 2 FFI is an FFI or branch of an FFI that is treated as a reporting FI under an applicable Model 2 IGA and that has registered with the IRS to comply with the terms of the FFI Agreement, as modified by an applicable Model 2 IGA. Each Model 2 FFI must undertake FATCA reporting directly to the IRS.
The following are the current Model 2 IGA jurisdictions:
FFIs in non-IGA jurisdiction must follow the FATCA regulations because their home country governments have decided not to enter into an IGA with the U.S. FATCA regulations require them to undertake FATCA reporting to the IRS to avoid FATCA withholding.
The following are Non-IGA jurisdictions:
Extension of Time
Given the impact coronavirus restrictions are having on staffing, you should determine as quickly as possible whether you will not be able to make the March 31 deadline. If you cannot, then you should determine whether it is possible for you to file IRS Form 8809-I to request an extension of time.
Thus far, the U.S. has not indicated that there will be a delayed FATCA reporting deadline and you should not assume that there will be one. U.S. Treasury Secretary Steven Mnuchin specifically excluded “the super rich” and corporations from his discussion of change in tax reporting deadlines.