In Notice 2014-33, the IRS has announced that it will treat calendar years 2014 and 2015 as a transition period for purposes of enforcing and administering implementation of the Foreign Account Tax Compliance Act (FATCA) by all withholding agents (including foreign financial institutions).
A transition period in relation to the enforcement of FATCA has been introduced by the IRS in Notice 2014-33. This will apply to withholding agents for the calendar years 2014 and 2015. One reason for the introduction of this transitional period is that the guidance to be issued in respect of the operation of FATCA has been delayed and is therefore not yet available, but the IRS has stated that instructions to those involved in operating the new system will be issued in the near future. The transitional relief will also apply to the withholding agents in relation to the changes in the conforming regulations to the information reporting and withholding regulation under chapters 3 and 61 of the Internal Revenue Code.
Limited foreign financial institutions (FFIs) and branches will obtain some relief from the regulations to the extent that they may open US persons resident in their jurisdiction. Some relief will also apply to non-participating FFIs. Where an FFI is unable under the local regulations to register with the FATCA portal of the IRS it may still be identified in that portal by another member of the group of which it is an affiliate. It would be identified as a limited FFE or branch.
