From IFC Review

The regulations require reporting FIs to notify TIA if they have reporting obligations under US FATCA and/or UK CDOT. With respect to US FATCA, Reporting FIs have until today to file their notification with an initial reporting deadline May 31st, reports FTSE Global Markets. With respect to UK CDOT, Reporting FIs have until April 30th 2016 to file their notification with an initial reporting deadline of May 31st next year as well.

A new slew of FATCA reporting and notification deadlines are now underway, kicking off May1.

The Cayman Islands Department for International Tax Cooperation (DITC) on April 16th released a new User Guide which clarifies the notification process by sponsoring Cayman financial institutions (Sponsoring FIs) with respect to sponsored Cayman FIs (Sponsored FIs) and filing a nil return. The three critical clarifications in the updated User Guide are that Sponsored FIs do not have to provide a notification on the AEOI Portal; the Sponsoring FI must provide notification (regardless of whether reporting is required) with its own global intermediary identification number (GIIN); and filing a nil return is not mandatory.

Prior to the release of the updated User Guide, there was uncertainty as to whether Sponsored FIs needed to notify TIA of their reporting obligations. DITC has now clarified this uncertainty and indicated in the User Guide that Sponsored FIs do not need to complete the notification process. The User Guide states that the notification for a sponsored group may be completed on a one-time basis by the Sponsoring FI using its own GIIN. Sponsoring FIs will be required to complete a single notification in order to submit reports for their Sponsored FIs.

The updated User Guide makes clear that for US FATCA purposes, a Sponsoring FI does not need to be a Cayman FI. For Sponsoring FIs which are not Cayman entities, the User Guide notes that the AEOI Portal may flag the non-Cayman GIIN for review by the System Administrator for approval. Those Sponsoring FIs will receive a notification confirmation. TIA expects there may be a delay in receiving the confirmation due to the anticipated volume of notifications over the coming weeks.

The updated User Guide provides information on a pdf document that must be attached to the notification to indicate the PPC has been authorised to act as such by the Reporting FI.

According to the DITC, whenever possible, the pdf document should be in a customary business form such as on letterhead or other similar medium, including formal email communication. If the authorisation was provided by a board resolution, a pdf document of the board resolution needs to contain all the relevant details of the PPC as required by the regulations.

Moreover, when the same identified and authorised natural person is the PPC for multiple FIs, the pdf document may list all of those FIs. The pdf document containing a list of FIs may be used in the notification process, but must be uploaded for each separate notification to which it pertains.

Earlier in the year, the DITC (on March 23rd) launched its AEOI Portal enabling reporting Cayman FIs (Reporting FIs) to satisfy their notification and reporting obligations under regulations (Regulations) issued by Tax Information Authority (TIA) which implement under Cayman law the intergovernmental agreements (IGAs) signed with the United Kingdom and the United States.

The US-Cayman IGA sets out the terms under which the provisions of the Foreign Account Tax Compliance Act (US FATCA) will be implemented. The UK Cayman IGA meantime sets out the terms under which the agreements between the United Kingdom and its Crown Dependencies (CDs) and Overseas Territories (OTs), collectively UK CDOT, will be implemented in the Cayman Islands.

The regulations require reporting FIs to notify TIA if they have reporting obligations under US FATCA and/or UK CDOT. With respect to US FATCA, Reporting FIs have until April 30th to file their notification with an initial reporting deadline May 31st. With respect to UK CDOT, Reporting FIs have until April 30th 2016 to file their notification with an initial reporting deadline of May 31st next year as well.

For groups with legal entities or funds resident in a number of different jurisdictions as well as the Cayman Islands, this will represent one of the first of a number of upcoming deadlines related to US FATCA reporting. The UK reporting deadline for example is 31 May 2015 and the deadline in Ireland and Luxembourg is 30 June 2015. FIs need be aware of these dates and the reporting processes which exist in each jurisdiction in order to ensure their compliance with FATCA requirements.

In the Cayman Islands, the first US FATCA reporting deadline of May 31st this year has been known of for some time, as the initial FATCA guidance notes on the implementation of the Cayman intergovernmental agreements (IGAs) were issued in July last year

According to Noble, “Cayman financial institutions have had a tight window between the March 2015 launch of the online portal to enable US FATCA reporting and the April 30th deadline to complete their notification”.

However, notes Noble, the announcement of a separate deadline of April 30th for completing registration or “notification” in the Cayman tax authority’s online portal was a more recent development. Notification is required by all reporting Cayman financial institutions (FIs), even if they have no reportable accounts and therefore ultimately no 2014 return to file. [Financial Institutions (FIs) in jurisdictions with model 1 type intergovernmental agreements (IGAs) implementing FATCA are required to report details of US account holders annually to their local tax authority, for onward exchange to the US IRS.]

In addition to providing their name, says Noble, FI category and global intermediary identification number (if registered with the IRS) in the notification form, reporting Cayman FIs also need to attach a letter identifying an individual as their Principle Point of Contact (PPOC) for all matters related to FATCA compliance.

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