On 9 December 2019, the Irish Revenue Commissioners (“Revenue”) published updated Guidance Notes on the Implementation of FATCA in Ireland (e.g. Tax and Duty Manual Part 38-03-22).
The Guidance Notes were updated to incorporate “IRS FAQ3 Reporting”, which was issued in October 2019 to address the treatment of Pre-Existing Accounts without a US TIN for the 2020 calendar year and subsequent reporting periods.
Currently, there are transitional measures in place which allow an Irish Financial Institution (“FI”) to report Pre-Existing Accounts without a US TIN by using a placeholder of 9 “As” for the 2017, 2018 and 2019 calendar years if certain prescribed conditions are met. This concessional treatment was due to expire post the 2019 calendar year.
The revised Irish FATCA Guidance Notes confirm that from 1 January 2020, Irish FIs can continue to report Pre-Existing Accounts without a US TIN by using a placeholder of 9 “As”. Irish FIs are also not required to immediately close or withhold on such Pre-Existing Accounts without a US TIN.
Where an Irish FI is unable to obtain a US TIN, this will not automatically lead to a determination of “significant non-compliance” by the IRS. However, the IRS will consult with Revenue and consider the facts and circumstances leading to the absence of a TIN to determine whether the Irish FI is in significant non-compliance. If so, the Irish FI will then have 18 months to address the issue.
We have also outlined below an overview of other recent AEOI developments since our last update
1.1 Irish Update on “Accidental Americans”
Revenue published an update on 5 December 2019 in relation to new Relief Procedures for Certain Former Citizens recently announced by the IRS. The procedures concern certain individuals affected by FATCA reporting, whom have been described as “Accidental Americans”. For FATCA purposes, these “Accidental Americans” would be considered “US Persons” under US law. Their US citizenship may have been acquired as a result of being born in the US or being born abroad to a parent who is a US citizen.
Under the Irish FATCA provisions, all Irish FIs must identify and report on any Individual Account Holders which are determined to be Specified US Persons, which includes both US citizens and US tax residents. In order to report on such Specified US Persons, Irish FIs must include each individual’s US TIN, which is generally not available in the case of “Accidental Americans”.
The new relief procedures allow certain former persons to renounce or otherwise relinquish their US citizenship. US citizens who avail of these new relief procedures will no longer need to be reported under FATCA to the IRS.
Revenue has indicated that it plans to integrate this guidance into Tax and Duty Manual 38-03-24 Revenue Guide to Automatic Exchange of Information (AEOI) for Financial Account Holders shortly.
1.2 Updated Reporting Entity Registration Form
On 31 October 2019, the Irish Revenue Commissioners published a revised Reporting Entity Registration Form. This Form should only be used to register with Revenue for FATCA and/or CRS purposes where an entity does not already have an Irish Tax Reference Number.
2.1 Updated AEOI Status of Commitments List
In September 2019, the OECD published a revised AEOI Status of Commitments List. There are now 49 jurisdictions which undertook their first exchange of information in 2017 with respect to the 2016 calendar year, 51 jurisdictions which undertook their first exchange of information in 2018 with respect to the 2017 calendar year and 9 jurisdictions which will undertake their first exchange of information in 2019/2020 with respect to the 2018/2019 calendar years. A further 47 developing countries have not yet set a date for their first automatic exchange of information. This brings the total number of jurisdictions committing to exchange information under CRS to 156.
2.2 MCAA Signatories
On 26 November 2019, the OECD published a revised list of MCAA Signatories, bringing the total number of signatories to 107.
2.3 Irish Participating Jurisdictions List
On 5 July 2019, the Irish Revenue Commissioners published the latest list of Participating Jurisdictions for CRS and DAC2 purposes, which now includes 97 jurisdictions. In avoidance of doubt, Irish FIs are required to report all non-Irish and non-US Account Holders.
2.4 Updated Tax and Duty Manuals
For completeness, we note that Revenue published updated Tax and Duty Manual Part 38-03-23: Standard for Automatic Exchange of Financial Account Information in Tax Matters – The Common Reporting Standard (CRS) in May 2019. However, there were no new CRS FAQs added and the changes primarily related to updating the format of the FAQs.