The United States Treasury Department and the Internal Revenue Service (IRS) have today issued proposed Regulations Relating to Information Reporting by Foreign Financial Institutions (FFIs) and Withholding on Certain Payments to Foreign Financial Institutions and Other Foreign Entities.

A joint statement was also released by the governments of the United States, France, Germany, Italy, Spain and the United Kingdom, stating that they are exploring a common approach to FATCA implementation through domestic reporting and reciprocal automatic information exchange. This statement also indicates that negotiations are in place so that UK FFIs may not need to enter into an FFI agreement with the IRS. It is not clear at this stage what impact this might have on Isle of Man FFIs.

Gordon Wilson, Advisory Director in the Isle of Man, said:

“The proposed regulations appear to reduce the burden of implementation but leave financial institutions with a significant amount of work in order to ensure compliance. The impact of the intergovernmental approach which is finally adopted will also have an impact on what financial institutions are required to do to comply with FATCA.  We will be holding FATCA update briefings in the near future for our clients and contacts.  Anyone who is interested in attending can contact us  at iomadvisory@iom.pwc.com to register their interest.”

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