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 not required to obtain a foreign TIN (or a reasonable explanation for why an account holder has not been issued a foreign TIN) for an account held by a resident of a jurisdiction that has been included on the IRS No TIN List.
IRS No TIN List
In 2017 and 2018, the IRS created exceptions to the collection of a foreign TIN for accounts held by residents in:
jurisdictions that do not issue foreign TINs; OR
jurisdictions with laws that restrict the collection or disclosure of foreign TINs of their residents and that make a request to the U.S. competent authority to be exempt from the foreign TIN requirement.
Currently, the list of jurisdictions that fit into one of the above two categories is:
FIs are not required to obtain a foreign TIN for an account held by a tax resident of a jurisdiction that appears on this list.
Updates to No TIN List
Any changes to the No TIN List will be posted on the IRS site. Changes will include additional jurisdictions which request to be added to the list (even if the jurisdictions issue foreign TINs to individuals or entities resident in such jurisdictions). The IRS will also update the list if a jurisdiction included on the list begins to issue foreign TINs to its residents.
For assistance, please contact me via my contact page or at elizabeth@elizabethmcmorrowlaw.com.