Bringing you live news and features since 2013
Bringing you news, views and analysis since 2013

7893

IFIC comments on the US Foreign Account Tax Compliance Act (FATCA)

RELATED TOPICS​

The Investment Funds Institute of Canada (IFIC) has submitted a comment letter to the United States Department of the Treasury and the Internal Revenue Service (IRS) in response to their Notice 2011-34, which was published on April 8, 2011; related to the implementation of the Foreign Account Tax Compliance Act (FATCA).

 

In its comment letter to the IRS and US Treasury, IFIC identified a number of issues that it will continue to work on with Treasury and the IRS.
The comment letter identifies the following issues:

Treatment of Canadian registered plans – IFIC submitted that foreign retirement plans, including Canadian registered and other similar plans, should be exempt from potential characterization as US accounts;

Definition of the term “documented US account” – Comments were provided regarding how current practices by mutual funds could be incorporated into FATCA to identify US persons for tax purposes;

Aggregating accounts – To ensure understanding and agreement upon how the aggregation protocols would impact Canadian mutual fund account reporting for FATCA; IFIC provided comments on specific scenarios and asked the IRS to confirm that our interpretations are correct;

Private banking account – IFIC noted that a mutual fund will never have its own private banking department, nor will it have its own employees or officers; so this provision of the notice should not apply to mutual funds. It was also noted that the definition of private banking is very broad and IFIC suggested that the definition be narrowed to a defined dollar amount on accounts with a value of $500,000 or more;

W-8BEN – To properly document that a client is not a US person for tax purposes, a Form W-8BEN may be required. These forms generally expire the third full year after the client signs it, and thus may need to be replaced. This ‘refreshing’ of the form is not consistent with the FATCA system for establishing the client’s US tax status for accounts valued at less than $500,000 so a request is being made that the form not have to be ‘refreshed’;

Certification standard – Standard wording was proposed for the certification process; and

Treatment of new accounts – There appears to be inconsistent treatment in the Notices issued by Treasury and the IRS regarding certain information that must be obtained for new and existing accounts.

IFIC will continue to discuss these matters with US Treasury and the IRS in order to achieve a resolution that is acceptable to all parties.

IFIC’s comment letter is available on the IFIC website at www.ific.ca.

Latest News

Data provider Preqin has published its Deal Flow Monitor: Q1 2024 report, examining trends in..
Global index revenues increased 9.3 per cent in 2023, totalling a record USD5.8 billion, according..
Octopus Investments (Octopus) has announced it has launched a Natural Capital Strategy...

Related Articles

Trends
The trend to buyout among the UK’s smaller defined benefit (DB) schemes continues with a slew of new sub GBP100 million deals announced this month alone...
The trend to buyout among the UK’s smaller defined benefit (DB) schemes continues with a slew of new sub GBP100..
Different flavours
In what is believed to be the first survey of its kind in the UK market, Nedgroup Investments, the investment-led, multi-boutique global asset manager with over USD20 billion under management, recently undertook a survey with 204 UK investment professionals, seeking insights into their perceptions and attitudes towards boutique asset managers...
In what is believed to be the first survey of its kind in the UK market, Nedgroup Investments, the investment-led,..
UK map
UK local government pension schemes (LGPS) are leading the charge on investment in private markets issuing tenders set to be worth billions of pounds in the coming years...
UK local government pension schemes (LGPS) are leading the charge on investment in private markets issuing tenders set to be..
The trend of private equity firms acquiring businesses in the professional services sector continues with CVC Capital Partners eyeing a possible buyout of EY’s Italian consulting branch...
The trend of private equity firms acquiring businesses in the professional services sector continues with CVC Capital Partners eyeing a..
Subscribe to the Institutional Asset Manager newsletter

Subscribe for access to our weekly newsletter, newsletter archive, updates on the site and exclusive email content.

Marketing by