On 16 December 2013, the Government of Malta and the United States announced the signature of the FATCA Intergovernmental Agreement (IGA) by both countries. As announced in July 2013, the IGA negotiated and agreed by Malta follows the Model 1 IGA (reciprocal version). The adoption of this model means that Maltese investment funds, banks and insurers should be able to register and report directly to the Maltese tax authorities in respect of their US resident beneficial owners or shareholders.
The IRS made available the FATCA registration website for financial institutions in August 2013. This was intended to allow financial institutions to begin the process of creating accounts and entering registration information. All information entered since 19 August 2013 has been automatically saved in the registration system associated with a financial institution’s FATCA account.
However, as per an announcement made by the IRS, all registrations effected prior 1 January 2014, including registrations submitted as final before 31 December 2013, are being treated as initiated but not submitted. Consequently, as from 1 January 2014, every registering financial institution is required to revisit its account and make amendments to any information entered if necessary. It will also be required to sign its foreign financial institution agreement (FFI Agreement) which it will enter into with the U.S. Department of Treasury by virtue of which the FFI can avoid FATCA withholding on payments it receives and become a participating FFI. Finally, the FFI will need to submit its registration information as final.
The IRS and Treasury anticipate that the final FFI agreement will be published prior to 1 January 2014.
For further information on FATCA, your related obligations and how it may impact your business, contact Donald Vella.