Tax Law Update: Final Regulations Implementing the Foreign Account Tax Compliance Act ("FATCA")


March.29.2013

On January 17, 2013, the Internal Revenue Service (“IRS”) released final regulations (the “Final Regulations”) implementing the reporting and withholding provisions of the HIRE Act (commonly known as the Foreign Account Tax Compliance Act, or FATCA, provisions) that target noncompliance by U.S. taxpayers using foreign accounts. The Final Regulations build on proposed regulations published on February 15, 2012, and IRS notices to provide additional certainty for financial institutions and government counterparts by finalizing the step-by-step process for U.S. account identification, information reporting, and withholding requirements for foreign financial institutions (“FFIs”), non-financial foreign entities (“NFFEs”), and U.S. withholding agents. As noted in our prior alerts, separate withholding regimes potentially apply to U.S. source payments to FFIs and NFFEs