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  • Jason Zücker, Director |

We hereby provide you with an overview of the reporting requirements for Swiss Financial Institutions (“SFI”) according to the FATCA and QI rules for the upcoming reporting for the tax year 2020 due in 2021.

QI and FATCA reporting deadlines

The table below summarizes the relevant forms and deadlines for the 2020 QI and FATCA reporting to be filed in 2021:

Forms Deadline to report to the IRS
Filing
Extension request possible?
8966
Non-consenting U.S. accounts
31 January 2021 Electronically via IDES No extension of time to file is permitted to report non-consenting U.S. accounts
1042 15 March 2021
(or 15 September 2021 if extension of time)
Paper format Yes, by completing Form 7004 until 15 March 2021 for an automatic 6-month extension of time
1042-S 15 March 2021
(or 14 April 2021 if extension of time)
Electronically via FIRE Yes, by completing Form 8809 until 15 March 2021 for an automatic 30-day extension of time
8966
Consenting U.S. accounts
31 March 2021
(or 29 June 2021 if extension of time)
Electronically via IDES Yes, by completing Form 8809-I until 31 March 2021 for an automatic 90-day extension of time

KPMG observations

The 2020 forms and instructions are available on the IRS website.

  • The Form 8966 is unchanged from the 2019 version.
    The date at which the test system for IDES will open (typically end of January) still needs to be published on the IDES website.
  • The Form 1042 is unchanged from its 2019 version.
    Similar to last year, SFI including branches acting as QDD must attach an additional statement regarding their QDD tax liability, which is the Schedule Q (Form 1042).

    Unfortunately, the IRS still expects a (duplicative) reporting of the QDD tax liability on Form 1120-F and Schedule Q (Form 1120-F). Under the transition rules in effect for Section 871(m) SFI will typically not have a QDD tax liability to report and thus no need to file Form 1120-F for 2020 (unless a Form 1120-F must be filed for any other reason, e.g. tax reclaim, ECI reporting). In case a Form 1120-F would need to be filed, it would be due by the 15th day of the 6th month after the end of an SFI’s tax year (e.g. 15 June 2021 for SFI with a 31 December financial year-end).
  • The Form 1042-S is unchanged from its 2019 version.

    The date until which the test system for FIRE is open (typically end of February) still needs to be published on the FIRE website.

    The new instructions include a reminder that QIs may rely on proposed regulations reducing the burden under FATCA and Chapter 3 for 2020. For SFI this is in particular relevant for adjustments to overwithholding under the reimbursement and set-off procedures, which can now be made until the earlier of the extended due date for filing Form 1042-S (i.e. 14 April 2021) or the date the Forms 1042-S are filed with the IRS. SFI may also use the extended due date for filing a Form 1042 (i.e. 15 September 2021) to claim a credit for any adjustments made to overwithholding by completing box 9 “overwithheld tax repaid to recipient pursuant to adjustment procedures”.

    In addition, SFI issuing Forms 1042-S on a recipient-by-recipient basis are reminded that the IRS now requires an extension of time to furnish statements to recipients (i.e. copy B, C and D) to be made via fax to:

    Internal Revenue Service Technical Services Operation
    Attn: Extension of Time Coordinator
    Fax: 866-477-0572 (International: 304-589-4151)


    The information to be included in the request letter and the deadline of 15 March 2021 remain unchanged.

As a reminder, compliance with Form 1042 and 1042-S reporting is one of the key areas of the IRS’ current enforcement and compliance initiatives. Many SFI have already experienced this, having received numerous and detailed follow-up queries on their QI reporting (especially variances in the 1042-S reconciliation) as part of the QI certifications filed by the Responsible Officer. We have also seen enforcement letters being sent by the IRS to SFI to explain and correct issues identified upon review of SFI’s annual Form 1042 and Form 1042-S reporting. Keeping that in mind, SFI should ensure that they have robust procedures and controls in place for their annual Form 1042 and Form 1042-S review, in particular for the Form 1042-S reconciliation, in order to avoid variances and follow-up action by the IRS.

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