Comply Updates

We have spent the last month identifying ways that we can continue to streamline our software while adding new functionality to make it easier for our clients to stay compliant. We have some exciting items in our pipeline, so stay tuned!

We are in the final stages of development with our eForms mobile app which will make obtaining documentation from your customers and account holders easier and more user friendly than ever before.

We are also excited to announce that we will be sponsoring next month’s Tax Withholding and Information Reporting virtual conference being held by Kaplan on the 10th and 11th of June. We are looking forward to the event and all the interesting sessions they have available. If you are not already attending, you can register for the conference here.

Key Updates and Reminders

While we are uncertain as to exactly when, the IRS is expected to release new Forms W-8 this year. This includes changes to the W-8ECI, W-8IMY, W-8BEN-E and W-8BEN.

With increasing interest in the digital asset space and continued lack of clarity from the IRS, it is important for cryptocurrency companies to continue to understand tax implications and their requirements for collecting and validating IRS withholding certificates from their account holders.

On May 17, 2021, The Treasury Inspector General For Tax Administration (TIGTA) published a report titled Backup Withholding Noncompliance and Underreported Employment Taxes Continue to Contribute to Billions of Dollars to the Tax Gap. In it, TIGTA explains that backup withholding noncompliance continues to be an issue for the IRS and has resulted in payors avoiding billions of dollars in withholding each year. One of the main reasons is that payors report large amounts of payments associated with Taxpayer Identification Numbers (TINs) of deceased individuals. You can access our full article here.

Now that U.S. Federal tax reporting season has ended, it is a great time to review your “B” Notice process and run queries on your data to identify any potential for a mismatched name and TIN combination, resulting in receiving a CP2100 or CP2100A Notice from the IRS later this year.

FATCA / CRS Key Dates & Reminders – Select Jurisdictions

Barbados

• The Barbados Revenue Authority announced the AEOI Portal is open and available for 2020 submissions. The portal opened on May 1, 2021, and will be available until July 31, 2021, to facilitate the filing of the 2020 FATCA and CRS reports. Submissions made after the deadline will incur a penalty.

Bermuda

• As a result of the ongoing impacts of COVID-19, the Bermuda Ministry of Finance has extended the below deadlines for Bermuda Reporting Financial Institutions (RFIs). Strict enforcement measures will apply for any filings submitted after these extended deadlines:
  • The deadline for submission of CRS filings for the period ended 12/31/2020 has been extended to June 30, 2021.
  • Any new CRS registrations must be submitted by June 15, 2021.
    
    
• The Bermuda Ministry of Finance also provided reminders for Bermuda RFIs regarding schemas, primary users, deactivation requests, undocumented accounts, and taxpayer identification numbers (TINs). Click here to read the full announcement.

British Virgin Islands

• The International Tax Authority (ITA) of the British Virgin Islands published an updated list of CRS reportable and participating jurisdictions for exchanges in 2021. Complete jurisdiction lists can be found at the below links:
  • Common Reporting Standard List of Reportable Jurisdictions
  • Common Reporting Standard List of Participating Jurisdictions

Guernsey

• The States of Guernsey Revenue Service posted Bulletin 2021/4 indicating that the Revenue Service is closely monitoring the COVID-19 pandemic. At present there has been no change to the date by which Reporting Guernsey Financial Institutions must submit their 2020 FATCA and CRS reports and the due date remains June 30, 2021.
  
  
• Bulletin 2021/4 also provided reminders for registration dates, as well as guidance on key compliance areas to consider when preparing and completing FATCA and CRS submissions. Click here to read the full bulletin.

India

• The Income Tax Department of India published Circular No. 9 of 2021 regarding extension of time limits of certain compliances to provide relief to taxpayers in view of the pandemic. Included in these extensions are the Statement of Reportable Accounts for FATCA and CRS for calendar year 2020 under Rule 114G of the Rules, which are required to be furnished on or before May 31, 2021. The circular indicated that the statements may be furnished on or before June 30, 2021.

Ireland

• The Office of the Revenue Commissioners of Ireland published updated Filing Guidelines for Foreign Account Tax Compliance Act (FATCA). Click here to access the updated guidelines.

Jersey

• Revenue Jersey issued Compliance Note 2 identifying a number of CRS and FATCA common errors and hallmarks of compliance. Included in the Note are common themes which can lead to Financial Institutions (FIs) not complying with their obligations under the rules and hallmarks of compliance to successfully approach FATCA and CRS obligations. Click here to read the full Compliance Note 2.