Horn
29th August 2013, 01:04 PM
Translated from Spanish.
USA has approved rules for obtaining information of fiscal relevance which responds to the name of FATCA (Foreign Accounts Tax Compliance Act) that has passed, surely, unnoticed for the majority of future affected despite its extraordinary significance for the markets.
The importance of FATCA is that this is not putting up of mechanisms for the exchange of information with other countries but that, suddenly, becomes (or tries to do so) to an infinite number of private entities of any country in the world in actors from obtaining the information interesting to the U.S. tax authority.
First, the new regulation is an invitation to the financial entities established outside the U.S. (known as Foreign Financial Institutions or FFI) to sign an agreement with the Internal Revenue Service, or as short, IRS (the equivalent of our tax agency) by which those commit to providing this information on U.S. citizens and their respective investments.
It should be noted that the standard adopts a very broad concept of financial that reaches not only to banks, but to any entity that it engaged in the investment and operational entity on securities, commodities and derivatives, such as brokers, insurance companies and investment funds, among others.
A German bank which had the agreement obligated to withhold on payments made to any Spanish institution not signing him
The institution adhered to the new system should provide information on all U.S. citizens who are holders of accounts at the institution not only directly but also through interposed entities.
Dangerous investment
Provision of information system is completed with a dangerous reversal of the burden of proof that the financial institution can avoid the consequences of failure to comply with its obligations under the signed agreement, is made to lie in her work to try, in your case, there are no American citizens that are account holders.
An invitation as it seeks to make the IRS should be accompanied by the corresponding incentive which consists in the imposition of a 30% withholding on U.S. source payments obtained by those entities which do not enter into the agreement.
There will be those who think that the key to the system is to avoid obtaining payments of U.S. source. Therefore, those entities that do not have direct investments in the United States would be, in principle, safe.
Unfortunately, the standard is more complicated. Among the obligations assumed by the FFI sign the agreement is the practice of withholding on the payments that other non-U.S. entities that have not signed it. It is what is known as a passthrough payments.
For example, a bank that had signed the agreement obligated to withhold on payments made to any Spanish institution not signing him. The only way that would have this last rid of retention would be signing, for his part, of the above agreement with everything that signature would entail, including the obligation to make deductions about the payments made to other entities that have not signed it.
We will not dwell on the apparent attack posed by this standard to a principle of law as it is that of territoriality laid down rules, unilaterally, by a country. Nor is the place to discuss in detail possible injustice that the imposition of such obligations to a number of entities without providing them any consideration directly or indirectly. In fact, it is inevitable to think about the cost in terms of management of information, not to mention the impact on the documentation of existing operations and future going to suppose this measure for many entities, cost which, obviously, will not be assumed by the Treasury U.S. or compensated in any other way.
The effective entry into force of the FATCA rules is scheduled for January 1, 2013 (although it will apply to the obligations arising from the March 18, 2012) and although there are many issues that are still pending of concretion, there is no doubt that, from now on, FATCA is going to be an element that affected institutions should take into account within the framework of their transactions.
http://blogs.elconfidencial.com/espana/tribuna/2011/07/15/fatca-la-ley-del-mas-fuerte-7677/
USA has approved rules for obtaining information of fiscal relevance which responds to the name of FATCA (Foreign Accounts Tax Compliance Act) that has passed, surely, unnoticed for the majority of future affected despite its extraordinary significance for the markets.
The importance of FATCA is that this is not putting up of mechanisms for the exchange of information with other countries but that, suddenly, becomes (or tries to do so) to an infinite number of private entities of any country in the world in actors from obtaining the information interesting to the U.S. tax authority.
First, the new regulation is an invitation to the financial entities established outside the U.S. (known as Foreign Financial Institutions or FFI) to sign an agreement with the Internal Revenue Service, or as short, IRS (the equivalent of our tax agency) by which those commit to providing this information on U.S. citizens and their respective investments.
It should be noted that the standard adopts a very broad concept of financial that reaches not only to banks, but to any entity that it engaged in the investment and operational entity on securities, commodities and derivatives, such as brokers, insurance companies and investment funds, among others.
A German bank which had the agreement obligated to withhold on payments made to any Spanish institution not signing him
The institution adhered to the new system should provide information on all U.S. citizens who are holders of accounts at the institution not only directly but also through interposed entities.
Dangerous investment
Provision of information system is completed with a dangerous reversal of the burden of proof that the financial institution can avoid the consequences of failure to comply with its obligations under the signed agreement, is made to lie in her work to try, in your case, there are no American citizens that are account holders.
An invitation as it seeks to make the IRS should be accompanied by the corresponding incentive which consists in the imposition of a 30% withholding on U.S. source payments obtained by those entities which do not enter into the agreement.
There will be those who think that the key to the system is to avoid obtaining payments of U.S. source. Therefore, those entities that do not have direct investments in the United States would be, in principle, safe.
Unfortunately, the standard is more complicated. Among the obligations assumed by the FFI sign the agreement is the practice of withholding on the payments that other non-U.S. entities that have not signed it. It is what is known as a passthrough payments.
For example, a bank that had signed the agreement obligated to withhold on payments made to any Spanish institution not signing him. The only way that would have this last rid of retention would be signing, for his part, of the above agreement with everything that signature would entail, including the obligation to make deductions about the payments made to other entities that have not signed it.
We will not dwell on the apparent attack posed by this standard to a principle of law as it is that of territoriality laid down rules, unilaterally, by a country. Nor is the place to discuss in detail possible injustice that the imposition of such obligations to a number of entities without providing them any consideration directly or indirectly. In fact, it is inevitable to think about the cost in terms of management of information, not to mention the impact on the documentation of existing operations and future going to suppose this measure for many entities, cost which, obviously, will not be assumed by the Treasury U.S. or compensated in any other way.
The effective entry into force of the FATCA rules is scheduled for January 1, 2013 (although it will apply to the obligations arising from the March 18, 2012) and although there are many issues that are still pending of concretion, there is no doubt that, from now on, FATCA is going to be an element that affected institutions should take into account within the framework of their transactions.
http://blogs.elconfidencial.com/espana/tribuna/2011/07/15/fatca-la-ley-del-mas-fuerte-7677/