The U.S. Treasury Department has postponed the withholding date stipulated by the Foreign Account Tax Compliance Act (FATCA) by six months, according to its advance copy of Notice 2013-43.
FATCA stipulates that withholding agents and foreign financial institutions begin their complying with its due diligence, withholding and reporting requirements; now payments subject to withholding will be those issued after June 30, 2014.
The Investment Company Institute has welcomed the postponement, saying it will allow funds more time to prepare and to clarify regulatory questions.
“This six-month delay will provide funds with significant additional time to implement FATCA’s many obligations with greater cost efficiency and to accommodate the successful and ongoing intergovernmental agreement initiative. These agreements will reduce further FATCA’s compliance burdens,” said Keith Lawson, Senior Counsel, Tax Law, for ICI and ICI Global.
Notice 2013-43 will be released on July 29, 2013.