Fatca and automatic information exchange an update

FATCA and Automatic Information Exchange: An Update

March 31, 2014

3rd Caribbean Conference on the International Financial Services Sector

Recent Updates and Key Upcoming Dates Recent Updates  February 20, 2014: The IRS released:  Amendments to the final FATCA regulations.  Coordinating regulations with existing withholding (Chapter 3) and informational reporting rules (Chapter 61).

 March 29, 2014: IRS publishes final Form W-8 BEN-E (Rev. 2014).

Key Upcoming Dates  April 25, 2014: – Last day to register on the FATCA Portal to guarantee publication on initial FFI list released by the IRS.  July 1, 2014: FATCA withholding applies to US Source FDAP Payments.

March 31, 2014

3rd Caribbean Conference on the International Financial Services Sector

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IGA Update

Recently Concluded IGAs • • • • •

Bermuda Canada Cayman Islands Chile Finland

• • • •

Hungary Italy Malta Mauritius

Status of Select Caribbean IGAs • Bahamas: In final negotiations with the IRS • Barbados: In negotiations with the IRS • BVI: Signed but text of agreement not officially released • Jamaica: In final negotiations with the IRS • St. Maarten: Exploring options • Trinidad & Tobago: Exploring options

March 31, 2014

3rd Caribbean Conference on the International Financial Services Sector

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Local Law Conflicts  The obligations imposed on FFIs may conflict with local law and expose FFIs (and NFFEs) to regulatory sanctions, civil suits or criminal prosecution.  Local law conflicts:  Data protection.  Consumer protection.

 Anti-discrimination.  Account opening/account closing laws or regulations.  Withholding of US tax on income or gross proceeds paid to an account holder.

 Local law may be violated, even if an account holder provides a waiver consenting to such actions (for example, on the basis of duress).  Local law conflicts place an FFI in an impossible position: either comply with FATCA and violate local law or do not comply with FATCA and be subject to the FATCA withholding tax.

March 31, 2014

3rd Caribbean Conference on the International Financial Services Sector

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Project Planning  Identify conflicts of law for non-IGA countries and cross border data management issues.

 Update and revise terms of business policies with customers to allow for information gathering for FATCA purposes.  Obtain client consent to obtain FATCA-required information and reporting client information to the appropriate government authorities.  Review FATCA requirements.

impact

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other

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 Review opportunities to minimize FATCA impact (e.g., “ring fencing”).  Consider other opportunities for savings such as entity rationalization.  Determine how automation can drive cost/benefit efficiencies.  Consider future-proofing for:  Evolving FATCA, both Classic and under IGAs.  Future FATCA-like laws.  Business change.

March 31, 2014

3rd Caribbean Conference on the International Financial Services Sector

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Presenter

Michael Silva Partner DLA Piper LLP (US) Miami, FL (305) 423-8530 michael.silva@dlapiper.com

March 31, 2014

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Michael Silva is a partner in DLA Piper's Tax practice, based in Miami. Mr. Silva focuses his practice on international tax law, with emphases on US investment structures, cross-border tax issues, tax treaty planning, withholding obligations of US real property investments and US activities of foreign banks.

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Mr. Silva's experience includes advising on investment structures and funds to invest in US real estate projects, assisting multinational corporations seeking to establish a business presence in the US, assisting international banks on US loans and other US activities, adviseing foreign clients on the US income, estate and gift tax consequences of alternative inbound investment structures while utilizing income, estate and gift tax treaties to minimize tax and regulatory burdens, establishing foreign trusts, corporations and advises clients on gratuitous transfers of wealth, including the US reporting requirements imposed on foreign trusts with US beneficiaries, advising on all aspects of withholding obligations on dispositions of US real property interests, representing estates of foreign and domestic decedents with property located in multiple jurisdictions, representing financial institutions in connection with payment made to nonresident aliens and beneficiaries of nonresident alien decedents, advising on domestic wills, trusts and other testamentary documents, including charitable, personal residence and qualified domestic trusts.

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He is board-certified by the Florida Bar in Tax Law and in International Law and is a Certified Public Accountant. He also served as Adjunct Professor of Law in the University of Miami Law School Graduate Tax Program.

3rd Caribbean Conference on the International Financial Services Sector

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DLA Piper – Global Law Firm 4,200 Lawyers, 77 offices, 31 countries

March 31, 2014

3rd Caribbean Conference on the International Financial Services Sector

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CIRCULAR 230 NOTICE  In compliance with US Treasury Regulations, please be advised that any tax advice given herein (or in any attachment) was not intended or written to be used, and cannot be used, for the purpose of (i) avoiding tax penalties, or (ii) promoting, marketing or recommending to another person any transaction or matter addressed herein.

March 31, 2014

3rd Caribbean Conference on the International Financial Services Sector

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