Waiting in vain: IRS announce FATCA delay 26 October 2012Washington Reporter: Georgina Lavers
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The US Internal Revenue Service announced that it has delayed the starting date of FATCA for non-US financial institutions in countries not covered by an intergovernmental agreement (IGA) with the US.
Instead of 1 January 2013, institutions now have until 1 January 2014 to put compliance procedures in place, and until January 2017 to start withholding taxes from customer accounts.
The delay is due to align countries which have not entered into IGA’s along with countries that have, such as the UK, France, Spain, Italy and Germany.
No formal announcement of the delay has been posted on the IRS’s website.
In a hopeful note to clients, Deloitte said that the 1 January 2013 effective date is: “statutorily mandated and thus it would take an act of Congress to change it.” However, the firm also alluded to the July 2011 a notice from the IRS, which provided long-awaited transitional relief for significant obligations under FATCA.
“The IRS stated in the accompanying news release that using a phased implementation takes into account concerns raised in
comments to Notice 2010-60 and Notice 2011-34 and the IRS’ desire to provide a workable timeline for FATCA implementation,” said Deloitte.
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