IFLR Guest Article: Private Investment Funds’ New Fatca Considerations

11/07/2013


The key compliance considerations for private investment funds caught by the looming US statute

The US Internal Revenue Service (IRS) and Treasury Department recently released Notice 2013-43 announcing a postponement in the implementation of the Foreign Account Tax Compliance Act (Fatca). Under Fatca, foreign financial institutions (FFIs) – including offshore investment funds, fund managers, investment advisors and fund administrators – will generally be required to comply with Fatca to avoid a 30% US withholding tax.

To comply with Fatca, an FFI will generally be required to enter into an agreement with the IRS agreeing, among other things, to report information on the FFI's US accounts (FFI agreement or agreement). An FFI will not, however, be required to enter into an FFI agreement if it is organised in a jurisdiction that has entered into an inter-governmental agreement (IGA) with the US and the FFI complies with the IGA's registration and reporting requirements.

Excerpted from IFLR, November 7, 2013. To view full article, click here (subscription required).

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