June 2024 | Issue 12
Comply Connect
Designed to not only keep you up to date with all things information reporting, but also to provide valuable insights into what lies ahead in the upcoming month.
Coming Up in July
Discover the U.S. information reporting and withholding obligations you should keep an eye on in the coming month.
Key Updates
Explore the Key updates provided by the IRS and other tax authorities from the last month you should be aware of.
FATCA & CRS Headlines
Take a look at our breakdown of the latest FATCA & CRS headlines to keep you up to date.
A message from our cEO:
As we move into the wonderful days of summer, we have some exciting updates to share. This month, we attended the EEI International Tax & Information Reporting Conference in New York. It was a fantastic opportunity to catch up with colleagues, clients and prospects, and hear updates from both the IRS and industry leaders. This was a great opportunity to showcase our latest innovations, announcing new tools embedded in our latest release and reinforcing our commitment to continuous improvement.
Our R&D team has been making great strides looking at GenAI solutions to enhance our products. We recently launched the innovative Withholding Statement Extractor, which will create efficiencies and accuracy when it comes to reading non-standardized withholding statements associated with Forms W-8IMY. Additionally, we announced Comply Solid, a new process to boost client data security. This is a very hot topic right now and in its early stages, but we have exciting plans for our new product, code-named Wallet. Stay tuned for more details!
Another exciting development is our integration of Copilots, which are enhancing user experience and productivity, thanks to strong support from Microsoft. These tools are simplifying processes and making work more engaging.
Thank you for your continued support. We’re thrilled about what’s ahead and look forward to sharing more updates soon.
Coming up in July
Cayman Islands: FATCA and CRS Filing Reminder
As a reminder, the DITC portal is open for 2023 CRS and FATCA submissions. The following reports need to be filed by 31 July 2024:
- 2023 CRS Report
- 2023 FATCA Report
- 2023 CRS Filing Declaration
Guernsey: FATCA and CRS Filing Reminder
As a reminder, since June 30, 2024, falls on a weekend this year, the deadline for Reporting Guernsey Financial Institutions (“RGFIs”) to submit both FATCA and CRS reports via the IGOR system is Monday, July 1, 2024.
June 2024 Key Updates
EEI International Tax & Information Reporting Conference
We attended the 2024 International Tax & Information Reporting Conference in early June where leading experts and industry professionals discussed the latest trends, regulatory changes, and strategic insights shaping our tax world. Here are some key takeaways from the event and you can read our full article here.
- New Form W-9 (March 2024)
- It was noted that a payor should have 6 months before it is required to use the new form. This is similar to the 6-month sunset period allowable for Forms W-8. This would mean that the new Form W-9 should be used by October 2024.
- New Line 3b requires a flow through entity to check the box indicating if they have any foreign partners, owners, or beneficiaries. Similar with other substitute form requirements, this line/box can be hidden if not applicable.
- Form W-8EXP Certification Period for Withholding Qualified Holder
- Final regulations for the new entity classification of Withholding Qualified Holder under Section 1445 on the W-8EXP provides that the certification is valid for the year of signature, plus 2 years. This differs from the standard expiration typically seen for most Forms W-8s of signature year plus 3 years.
- Final regulations for the new entity classification of Withholding Qualified Holder under Section 1445 on the W-8EXP provides that the certification is valid for the year of signature, plus 2 years. This differs from the standard expiration typically seen for most Forms W-8s of signature year plus 3 years.
- 2025 Greenbook Proposal
- The current proposal would require payees to provide Forms W-9 for other 1099 payment types effective December 31, 2024. This would include payments required to be reported on the Form 1099-MISC and Form 1099-K. The proposal would be effective for payments made after December 31, 2024.
- The current proposal would require payees to provide Forms W-9 for other 1099 payment types effective December 31, 2024. This would include payments required to be reported on the Form 1099-MISC and Form 1099-K. The proposal would be effective for payments made after December 31, 2024.
- IRS Audits
- The IRS has ramped up the number of Form 1042 audits around the country. This is not industry specific; audits are happening across industry, including Accounts Payable groups. The IRS is specifically looking at things like Foreign TIN requirements and Treaty Exemptions.
- The IRS has ramped up the number of Form 1042 audits around the country. This is not industry specific; audits are happening across industry, including Accounts Payable groups. The IRS is specifically looking at things like Foreign TIN requirements and Treaty Exemptions.
IRS New FAQs for QIs
On June 3, 2024, the IRS issued FAQ 3 on the QI/WP/WT page under the section Provisions for 2023 QI agreement. This FAQ provides guidance to QIs acting as intermediaries for payments of substitute dividends and clarifies whether such QIs are required to assume primary withholding responsibilities for all such payments they receive and pay as an intermediary.
On June 8, 2024, the IRS also issued FAQ 24 and FAQ 25 on the QI/WP/WT FAQs page under the section Certifications and Periodic Reviews. FAQ 24 provides guidance to QIs submitting non-waiver certifications with a periodic review year of 2021 or 2022, and a certification period ending during the term of the 2023 QI agreement. FAQ 25 provides tips to QIs on reviewing their certification before submission.
U.S. – Russia Tax Treaty
As of August 16, 2024, the income tax treaty between the U.S. and Russia will be suspended, meaning that taxpayers will no longer be able to claim reduced rates of withholding as previously allowed under the tax treaty. The suspension will take effect both for taxes withheld at source and in respect of other taxes on August 16, 2024, and will remain in effect indefinitely.
Withholding agents should update the necessary flows and procedures to account for this change and the new withholding rates.
June 2024 FATCA & CRS Headlines
Bahamas: CRS Reportable Jurisdictions
A final list of CRS reportable jurisdictions was published by the Bahamas Competent Authority. The list did not include any changes to previously reported reportable jurisdictions.
The deadline for TY2023 FATCA and CRS reporting is August 23, 2024.
Barbados: Guidance Note OGC No. 04/2024
During June, the Barbados Revenue Authority (“the Authority”) issued Guidance Note OGC No. 04/2024. The Authority advised Reporting Barbados Financial Institutions (“RBFIs”) that the AEOI web portal will be open from Thursday, August 1st to Friday, August 30th to facilitate prior year filings for the reporting years 2018 – 2022 for FATCA and CRS reports. Reports for reporting year 2023 cannot be submitted at this time.
Cayman Islands: Updates Bulletin
During June, the Cayman Islands DITC published an Updates Bulletin. The bulletin was previously posted in April; however, the CRS Reporting Reminders section has been updated.
IDES Testing
The IDES Open Testing window is from July 1, 2024, to July 26, 2024, and testing will only be open to users who complete IDES enrollment by June 26, 2024. If you are an eligible tester, then you will receive an email on or before June 28, 2024, with specific instructions on how to connect to the test site.
Singapore: IRAS FAQs on FATCA
On June 21, 2024, the Inland Revenue Authority of Singapore (IRAS) published updated FAQs on FATCA. FAQ B.8 has been updated to remind Reporting SGFIs to follow the procedures specified in sections 3.02, 3.03 and 3.04 of the U.S. IRS’ Notice 2023-11, which was released in January 2023, so as not to be treated as in significant non-compliance with its FATCA obligations by the U.S. Competent Authority.
Switzerland: Switching from a Model 2 IGA to a Model 1 IGA
Switzerland will be switching from a Model 2 IGA to a Model 1 IGA. We are not sure when exactly this will take effect but when it does, Reporting FFI’s in Switzerland will report directly to Switzerland instead of reporting to the U.S. This also means that Switzerland will be entitled to receive information on accounts held in the U.S. by Swiss citizens.
About Us
Comply Exchange was built to give businesses and individuals alike the support that they need to comply with the complex and ever-evolving regulatory tax burdens imposed by the IRS and other global authorities with respect to information reporting and withholding.
Reach out to our experts today to schedule a demo and see how our software and services can help you streamline and automate your tax compliance needs.
