McDermott Will & Emory is reporting that non-US retirement plans must comply with FATCA regs by July 1 or claim an exemption.
In 2013, the IRS published final FATCA regs. FATCA imposes significant reporting obligations on both non-US foreign financial institutions (“FFIs”) and US taxpayers holding foreign financial accounts.
Non-US retirement plans are generally included within the definition of an FFI, meaning that, absent an exemption, they must register and disclose information about their US taxpayer-participants.
A non-exempt FFI that fails to comply with FATCA is subject to immediate 30 percent withholding on interest and dividend payments from U.S. stocks and bonds and, beginning in 2017, on the sales proceeds of such investments.
Note: If a non-U.S. retirement plan is an FFI, it must document its exemption from FATCA by July 1, 2014, or be subject to the withholding described above.
Posted by Lewis J. Saret, Co-General Editor, Wealth Strategies Journal.