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FATCA update

Posted by: Zaher Fallahi
Posted On: Jun 11, 2014

As of now, approximately 68 countries and jurisdictions have singed some type of Intergovernmental Agreement (IGA) with the US and will be reporting their US persons’ financial accounts information to the IRS as of July 1, 2014, subject to certain limited exceptions.  About   77,350 Foreign Financial Institutions (FFI) have registered, some from countries that have not even signed an IGA.  Each FFI obtains a Global intermediary identification number (GIIN).  The IRS expects at least another 70,000 –100,000 FFIs to register in the near future. The IRS estimates a total of 500,000 FFIs will be registered. Here is a rough breakdown on the FFIs by the country or jurisdiction; Cayman Islands 14,800, British Virgin Island 1,830, Netherlands 2050, Switzerland 4,040, Liechtenstein 235, China 200, India 245, Russian 500, Brazil 2,250 and Palestine 23. There was a pending IGA negotiation between Russia and the US. However, it was put on hold for the time being because of the Ukrainian Crisis. Notwithstanding, some Russian FFIs have already registered. The US will withhold 30% from some payments to non-compliant FFIs.

For assistance with tax preparation, tax planning, IRS representation, disclosing undeclared foreign bank accounts (offshore voluntary disclosure program, OVDP), report of foreign bank & financial accounts (FBAR, Foreign Account Tax Compliance Act (FATCA), contact  Zaher Fallahi, Tax Attorney, CPA at (310) 719-1040 (Los Angeles), ( 714) 546-4272 (Orange County) or e-mail : taxattorney@zfcpa.com