United States: It's May 5, 2014: Do You Know Where Your GIIN Is?

As we discussed in a prior Herrick tax alert, 2014 will see the implementation of a significant number of new tax compliance requirements, including those under the "FATCA" (Foreign Account Tax Compliance Act).¹ One of the key FATCA milestones is the registration with the IRS to obtain a "global intermediary identification number" ("GIIN").

May 5, 2014, is the last day to finalize registration with the IRS and obtain the GIIN and be included on the first IRS FFI (Foreign Financial Institution) List (expected to come out on June 2, 2014).

If you are a foreign investor (other than an individual), you will need to consider whether you have to obtain a GIIN. If you are required to obtain a GIIN but fail to do so by today, you could be subject to FATCA withholding on U.S.-source investment income, such as interest and dividends, beginning on July 1, 2014.

An exception applies to an FFI that reports to a foreign jurisdiction under a Model 1 Inter-Governmental Agreement. A withholding agent does not need to obtain a reporting Model 1 FFI's GIIN for payments made before January 1, 2015.

The Cayman Islands is a good example of such jurisdiction. While a reporting Model 1 FFI is currently able to register and obtain a GIIN, it is not required to do so before July 1, 2014, and must only ensure that it is included on the IRS FFI list before January 1, 2015.

Footnote

1 FATCA is extremely complex and its rules and regulations are currently in the process of being finalized. This discussion is for informational purposes only, and does not address each and every specific point that forms part of FATCA.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.