The IRS requires all FFIs to enter into an FFI-agreement under which the FFIs agree to comply with certain reporting, client due diligence and withholding requirements on payments to recalcitrant account holders and non-reporting FFIs. The IRS is moving forward with enforcement and has terminated agreements/GIIN of Argentinean entities that have not complied with the required obligations.
In short terms, four types of FFI’s are distinguished in the following manner. An entity that:
There are certain obligations that FFIs must comply with. Shortly summarized, a participating FFI must:
It is important to check the Entity’s classification and compliance. In practice we have seen:
Depending on the classification of the entity, compliance obligations and certifications that should be submitted to the IRS, may change.
Enforcement by the IRS is not just an eventual risk but a reality. The IRS has already terminated agreements with Argentinean FFIs that have not complied with FATCA obligations.
We can assist you with all FATCA issues. Our people have implemented AEOI procedures for banks, custodians, and funds located in the principal financial centers of Latin America.
For more information do not hesitate to contact us.