The Comply Catch-Up – January 2022 Issue 14

Jan 31, 2022

Comply Updates

Comply would like to wish you all a Happy New Year! With 2022 well underway, and with reporting front and center, we still continue to work on many new developments and innovations that we look forward to unveiling soon!

With several new partnerships in place, and some in the making, now is a great time to join our partnership program. These partnerships enable us and our partners to collaborate and benefit across a multitude of organizations and are already providing the market with leading U.S. Information Reporting and Withholding solutions. Documentation collection and validation is generally best suited to work alongside onboarding applications, AML/KYC collection and directly in line with year-end reporting solutions. That’s what we are now providing and actively looking to expand. We are establishing the processes to help make the customer lifecycle as seamless and centralized as possible. Come and speak to us as we look to bring these market leading solutions together to benefit all!

Don’t miss out on any of our announcements – make sure to follow us on LinkedIn or sign up to receive marketing content here.

Key Updates and Reminders

    2021 Information Returns (not reporting nonemployee compensation) 

    • The following information returns must be filed with the IRS by February 28, 2022 (March 31 if filing electronically): 
      • Form 1099-B, Proceeds from Broker and Barter Exchange Transactions 
      • Form 1099-DIV, Dividends and Distributions 
      • Form 1099-G, Certain Government Payments 
      • Form 1099-INT, Interest Income 
      • Form 1099-MISC, Miscellaneous Income 
      • Form 1099-K, Payment Card and Third-Party Network Transactions 
      • Form 1099-OID, Original Issue Discount 
      • Form 1099-PATR, Taxable Distributions Received from Cooperatives 
      • Form W-2G, Certain Gambling Winnings   

    Payors that need additional time to file the above-mentioned forms with the IRS can request a 30-day extension from the IRS by filing Form 8809, Application for Extension of Time to File Information Returns, by the due date of the form.  

    2021 Information Returns for Nonemployee Compensation (Form 1099-NEC) 

    • Form 1099-NEC, Nonemployee Compensation, must be sent to recipients and filed with the IRS by January 31, 2022. 
    • As a reminder, the PATH Act eliminated the automatic 30-day extension for filing forms with the IRS that include nonemployee compensation; however, payors that need more time to file Form 1099-NEC must meet certain criteria found on Form 8809, Line 7, regarding hardship conditions for requesting the extension.  

    Form 945 

    • Form 945, Annual Return of Withheld Federal Income Tax, is due on January 31, 2022. For payors that made deposits on time and in full, Form 945 is due on February 10, 2022.  

    Forms 1042/1042-S 

    • Forms 1042-S must be filed with the IRS and furnished to the recipient of the income by March 15, 2022.  
      • A 30-day extension of time to file Form 1042-S may be requested by filing form 8809, Application for Extension of Time to File Information Returns.  
      • A 30-day extension of time to furnish recipients statements may be requested by faxing a letter to:
        Internal Revenue Service
        Technical Services Operation
        Attn: Extension of Time Coordinator
        Fax: 877-477-0572
        (International: 304-579-4105)
    • Form 1042 must be mailed to the IRS by March 15, 2022. 
      • An extension of time may be requested by submitting Form 7004, Application for Automatic Extension of Time to File Certain Business Income Tax, Information, and Other Returns. Form 7004 does not extend the time for payment of tax.

    2022 Form 1099-K Threshold 

    • The American Rescue Plan Act of 2021 lowered the threshold for reporting on Form 1099-K, Payment Card and Third-Party Network Transactions. This form is used to report payments: 
      • From payment card transactions (e.g., debit, credit, or stored-value cards), and/or 
      • In settlement of third-party payment network transactions above the minimum reporting thresholds. 
    • For returns for calendar years after 2021, payors must report gross payments that exceed $600 and any number of transactions. This is quite a step down from the prior requirement for payors to report gross payments that exceed $20,000 and more than 200 such transactions. Now, a third-party settlement organization must report any information concerning third party network transactions of any participating payee only if the gross amount of total reportable payment transactions exceeds $600 for the calendar year, regardless of the number of transactions. 
    • It is worth noting that the Form 1099-K (Rev. January 2022) is now a continuous use form. 
    • Check out the Form 1099-K and Instructions, both revised in January 2022, here: 

    FATCA / CRS Key Dates & Reminders – Select Jurisdictions

    Barbados  

    • The Barbados Revenue Authority (the Authority) published a guidance note regarding FATCA and CRS reporting. After validating the FATCA and CRS data received from Reporting Barbados Financial Institutions for the reporting year 2020, the Authority has observed the following: 
      • Entities have provided dates of birth for reportable persons which are possibly incorrect; and 
      • In the absence of tax identification numbers, entities have entered nine A’s, 0’s, or 9’s, or have used the series of codes developed by the Internal Revenue Service.  

    The Authority gives notice that Reporting Barbados Financial Institutions that submitted data as described above are required to make all necessary corrections to their data and file a corrected report on or before February 28, 2022.  

    British Virgin Islands  

    • The International Tax Authority of the British Virgin Islands published a notice informing all Virgin Island Financial Institutions (VIFIs) that the British Virgin Islands Financial Account Reporting system (BVIFARs) is back online. As a reminder, below are important enrolment and submission deadlines: 
      • Annual enrolment deadline for FATCA: April 1, 2022 
      • Annual reporting submission deadline for FATCA: May 31, 2022 
      • Annual enrolment/notification deadline for CRS: April 30, 2022 
      • Annual reporting submission deadline for CRS: May 31, 2022 

    Germany  

    • The Federal Central Tax Office (BZSt) published CRS Newsletter 01/2022. It informs Reporting Financial Institutions (RFIs) of the following:  
      • Postponement of the date for electronic transmission of reports on missing self-certifications due to technical difficulties, which were previously due January 1, 2022.  
      • Amendment of the form for reporting missing self-certifications.  
      • Explanation for reporting missing self-certifications.  

    Guernsey  

    • On January 7, 2022, the States of Guernsey Revenue Service published Bulletin 2022/1. The Bulletin contained the following updates: 
      • List of Reportable Jurisdictions for 2021 – updated to include Jamaica, Kenya, Maldives, and Trinidad & Tobago and updated to remove Liberia.  
      • Provisional List of Reportable Jurisdictions for 2022 – updated to include Jordan, Moldova, Montenegro, Thailand, Uganda, and Ukraine.  
      • List of Participating Jurisdictions – updated to include Jamaica, Moldova, Rwanda, Uganda, and Ukraine.  
      • List of jurisdictions to which the Director sent information in relation to 2020 CRS data.  

    Isle of Man 

    • On January 4, 2022, the Income Tax Division of Isle of Man published an Industry Advisory Notice with updates in respect of the Common Reporting Standard. The Notice contained the following updates: 
      • List of Reportable Jurisdictions for 2021 – updated to include Jamaica, Kenya, and Morocco. 
      • Provisional List of Reportable Jurisdictions for 2022 – updated to include Jordan, Moldova, Montenegro, Thailand, Uganda, and Ukraine.  
      • List of Participating Jurisdictions – updated to include Jamaica, Moldova, Rwanda, Uganda, and Ukraine.  
      • The notice also indicates that GN53, the Isle of Man’s CRS guidance notes, will be updated and available soon.  

    Malaysia  

    • The Inland Revenue Board of Malaysia (IRBM) posted 2022 CRS submission timelines for Malaysia FIs (MYFIs):  
      • The registration portal is open at all times. FIs who register after the submission deadline will be considered as late registration and upon submission will be subjected to a penalty.  
      • The testing environment is also open at all times. IRBM reminds MYFIs to ensure test files do not contain any production data.  
      • File transmission will be completed through the HASiL International Data Exchange Facility (HiDEF) which is accessible after you have logged in to the portal. The portal will be available from January 20, 2022 – June 30, 2022.  

    Singapore 

    • The Inland Revenue Authority of Singapore (IRAS) released a user guide for Reporting Singapore Financial Institutions (SGFIs) to view or update their AEOI profile on myTax Portal. It is noted that the SGFI should have their Singpass and Singapore Tax Reference Number ready as it will be required to use the service. 

    United Arab Emirates 

    United Kingdom 

    • United Kingdom HMRC published an updated list of reportable jurisdictions for the 2022 reporting year, in respect of 2021 reportable accounts. Changes since 2021 reporting year include addition of Jamaica, Kenya, Maldives, and Morocco and removal of Kuwait and Romania from the list.  
    • HMRC also published an updated list of 2022 participating jurisdictions for CRS purposes. Changes since 2021 reporting year include the addition of Jamaica, Kenya, Morocco, and New Caledonia and removal of Sint Maarten from the list.

    United States 

    • The IRS issued a reminder for the FATCA certification period ending December 31, 2021, FATCA Responsible Officer (RO) certifications are due no later than July 1, 2022. If an entity that is required to certify does not submit its certifications by the due date, the entity will not be in compliance with its obligations under FATCA. Non-compliance may result in revocation of an entity’s FATCA status, and ultimately, the entity’s GIIN being removed from the FFI list.