FATCA update for Cayman financial institutions
The Foreign Account Tax Compliance Act (FATCA), which was enacted by the US in 2010 and comes into force on 1 July 2014, imposes due diligence, information reporting and control burdens on a range of non-US financial intermediaries and investment entities (foreign financial institutions or FFIs), including banks, other financial institutions, certain insurance companies, investment funds and other collective investment vehicles.
FFIs will be required to register with the Internal Revenue Service (IRS) and disclose account-holder information for certain US persons that have investments in or are managed by FFIs.
Failure by an FFI to register with the IRS or to comply with the reporting obligations will result in a 30 per cent withholding tax being imposed on gross payments to the FFI from a US resident payor…
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News from Conyers Dill & Pearman
Briefings from Conyers Dill & Pearman
This article provides a reminder of the impending deadlines and action that is required for those BVI entities that are classified as ‘foreign financial institutions’ for the purposes of FATCA.
Cayman has taken a creditor-friendly approach to implementation.