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The Comply Catch-Up – July 2022 Issue 20

Comply Catch-Up July 2022

Key Dates and Reminders

  • On July 8, the U.S. Treasury Department provided notice to Hungary that it is terminating the U.S.-Hungary income tax treaty, first enacted in 1979. The Treasury explained this action citing long-standing concerns with Hungary’s tax system and the tax treaty. “The United States, across administrations, has had long-held concerns with Hungary’s tax system and the Hungary treaty,” a Treasury spokesperson said in a statement provided to the Washington Examiner. “We discussed these concerns with Hungary starting last fall, but are taking this step due to a lack of satisfactory action by Hungary to remedy these concerns.”

    An analysis performed by the Treasury found that the treaty’s benefits now just unilaterally benefit Hungary. The U.S. is in the process of sending over the notice of treaty termination, after which the treaty will be ended following a six-month period. The treaty termination will apply to payments of U.S.-source dividends, interest, and royalties for payments made on or after January 1, 2024.

  • The IRS released Proposed Regulations last year that would amend the rules around filing electronically for many information and income tax returns. This includes amendments around the requirements for when a withholding agent is required to file the Form 1042, Annual Withholding Tax Return for U.S. Source Income of Foreign persons, electronically.

The Form 1042 is not currently required to be filed electronically and while the Proposed Regulations are not yet final, it is expected that the Form 1042 will be added to the Modernized eFile (MeF) system in January.

  • The IRS will be hosting a live webinar with important information around Form 1042, Annual Withholding Tax Return for U.S. Source Income of Foreign Persons. The webinar is scheduled for Tuesday, August 4, 2022, at 2:00pm EST and is intended to cover an overview of each section of the form, common errors, and a Q&A portion.

FATCA / CRS Key Dates & Reminders – Select Jurisdictions

OECD

  • On July 19, 2022, the OECD published updated information on Tax Identification Numbers for Guernsey. Check out the updated information here.


Australia

  • The Australian Tax Office (ATO) published a new AEOI self-review guide and toolkit. The guide and toolkit is intended to provide Reporting Financial Institutions (RFIs) information on how to conduct a self-review of the AEOI framework and outlines three fundamental areas of compliance:
      • AEOI Governance
      • Due Diligence Obligations
      • Reporting Systems


Bahamas

  • On June 30, 2022, the Bahamas Competent Authority posted an updated CRS-AEOI Partner List effective as of June 27, 2022. Curacao, Ecuador, and Peru were added to the list and Costa Rica was removed.


As a reminder, the Bahamas AEOI Portal opened on Monday, July 18, 2022, at 9am EDT for FATCA, CRS, and CbC registrations and report submissions and will close on Friday, August 26, 2022 at 5pm EDT.

Check out the updated Partner List here.

Cayman Islands

  • On July 7, 2022, the Department for International Tax Cooperation (DITC) of the Cayman Islands posted an Industry Advisory with a reminder of the upcoming 31 July statutory deadline for the submission of 2021 reports for both FATCA and CRS reporting. As part of the reminder, the DITC notes that as the statutory deadline of 31 July 2022 falls on a Sunday this year, the DITC will accept FATCA and CRS submissions up to Monday, 1 August 2022.Check out the Industry Advisory here.

  • The DITC also issued updated Enforcement Guidelines: Common Reporting Standard Version 1.2 in July, which replaces the previous Version 1.1. issued in June 2022. Check out the updated guidelines here.

Germany

  • The Federal Central Tax Office of Germany (BZSt) published CRS Newsletter 05/2022. The newsletter includes a final state exchange list for 2022 and information on an updated BMF letter containing amendments to FATCA and CRS regimes.

Singapore

  • On July 19, 2022, the Inland Revenue Authority of Singapore published an updated List of IRAS FATCA File and Record Level Errors. Error code 1036 was added to the list when the ReportingFI.TIN has not been populated or contains only space character(s).

Comply Updates

Join us at the Sovos Comply and Connect Conference in Washington, D.C. on November 9 – 11. This annual event showcases experts addressing top changes and challenges your business faces in tax withholding and information reporting compliance. Register here.

If you would like to schedule a demo and discuss how Comply can help you automate and centralize your information reporting and withholding requirements, contact us at contact@complyexchange.com.

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