24.01.2019

9'

Reporting Reminder 2019

CRS

Since tax year 2017, Swiss financial institutions must report CRS data to the Swiss Federal Tax Authority (SFTA). New Swiss Reporting FIs must register on the Swiss registration and filing portal (ESTV SuisseTax). For tax year 2018 the reporting FIs must transmit the reportable information to the SFTA by June 30, 2019 the latest. The reports must be filed according to the SFTA technical instructions.

The data can be filed in three ways:

  1. Upload of XML-file via ESTV SuisseTax (XML Data-Upload)

  2. Manual data entry via ESTV SuisseTax (Online form)

  3. Webservice-interface from machine to machine (M2M)

The SFTA has released a guide for the data transmission.

If a FI chooses the third way, the interface must be activated first. 

The reports cannot be filed in paper form.

8966 FATCA Reporting

Important changes in brief

Reporting on accounts held by Non-Participating FFIs

Reporting Model 2 FFIs that reported Non-Participating FFIs as part of their non-consenting reporting in January are not required to report such accounts anymore. Therefore, the respective boxes and lines do not have to be filled out (Line 5 of Part II, Line 1 and 3 of Part V).

Reporting Model 2 FFIs reporting on non-consenting U.S. accounts

For preexisting accounts that are non-consenting U.S. accounts reported by Reporting Model 2 FFIs, the following pooled reporting categories should be used: 

For cases where a newly opened individual account has a change in circumstances that causes the original self-certification to be incorrect or unreliable, and where the Reporting Model 2 FFI is unable to obtain a valid self-certification establishing whether the account holder is a U.S. citizen or resident, pooled reporting category “recalcitrant account holders with U.S. indicia” should be used.

Identifying numbers for paper Forms 8966

A unique identifying number must be assigned to each Form 8966 filed on paper. For tax year 2018, the three-digit identifying number must be entered in the box for “Identifier” at the top of the form.

Filing Forms

Swiss Reporting Model 2 FFIs have the following two reporting deadlines for the tax year 2018: 

It is within the responsibilities of the FFI to perform the 8966 FATCA reporting and a delegation of the responsibility to a custodian is not possible.

As a Swiss Reporting Model 2 FFI, the 8966 FATCA reporting is performed electronically through the International Data Exchange Service (IDES). The FATCA XML Schemas and Business Rules for Form 8966 and the publications contained therein provide guidelines to meet the FATCA reporting requirements.

In addition, the aggregated reporting of non-consenting accounts may result in a group request from the U.S., which, in turn, may require a Reporting Swiss Financial Institution to transmit account data to the Swiss Federal Tax Administration (FTA). The data and documentation needed to be sent to the FTA additionally include a SEI-XML file and further documentation in pdf format. Further information can be found on the website "Administrative assistance to FATCA" of the FTA.

We will be able to provide support in case of a group request.

Extension request

To request an automatic 90-day extension of time to file Forms 8966 to report consenting accounts, use Form 8809-I. Please note that Swiss Reporting Model 2 FFIs cannot request an extension of time to file Form 8966 to report non-consenting accounts.

1042-S and 1042 QI Reporting

Important changes in brief

Changes to withholding rates

Since tax year 2018, the rate of withholding under section 1446 by a publicly traded partnership on a distribution of income effectively connected to a U.S. trade or business has changed to 21% for corporate partners and 37% for all other partners.

Changes to codes

Chapter 4 status codes for „U.S. branches treated as U.S. persons” (code 05) and „U.S. branches not treated as U.S. persons that are reporting under Regulations section 1.1471-4” (code 06) have been added.

The LOB Treaty Category code for individuals (code 01) has been removed. Withholding agents reporting an individual claiming treaty benefits should leave Box 13j blank.

New field for employer number (EIN identification) of a QDD

QDDs that made any payments (whether or not the payments are subject to withholding) during tax year 2018 should check the box in Section 4 of Form 1042 and enter the EIN of the QDD (and not the QI-EIN) in the new field and include a statement of the payments made.

Reminder: Unique form identifier

Since tax year 2017, a unique identifying number must be assigned to each Form 1042-S. The number cannot be the recipient’s U.S. or foreign TIN, it must be numeric and exactly 10 digits.

Reminder: Amended forms

Since tax year 2017, each amended Form 1042-S must have an amendment number. Any amended form must have the same unique form identifier as the original form that is being amended.

Reminder: U.S. Payee Pools

Please keep in mind that forms 1042-S for payments paid out to Chapter 4 U.S. Payee Pools (accounts held by U.S. persons) must be filed. These forms will be usually reported under chapter 4 exemption code 18 (U.S. Payees of participating FFI or registered deemed-compliant FFI) and recipient code 48 (U.S. Payees Pool).

Reminder: Potential 871(m) transactions

Please be reminded that since tax year 2017, Section 3 of Form 1042 applies to payments made by a withholding agent under any potential section 871(m) transaction (rather than just payments made under notional principal contracts or other derivatives contracts that reference a U.S. stock or underlying security). If you are acting as withholding agent for amounts treated under Section 871(m) (usually under Income Code 40), whether you are acting in a QI or QDD capacity, you should check the Box in Section 3.

Filing Forms

You must file your 1042-S and 1042 reporting with the IRS by March 15, 2019. You have the option to request an automatic extension of time to file (see below).

You have to file Forms 1042-S electronically as a .txt-file through the FIRE system. You can find the specifications for the electronic filing of Forms 1042-S for the tax year 2018 in Publication 1187.

Form 1042 must still be filed on paper. You may be required to attach copies of forms 1042-S received by upstream withholding agents. For filing Form 1042, please use the following address:

Ogden Service Center

P.O. Box 409101
Ogden, UT 84409
USA

Be sure to retain proof that you mailed the tax forms on time. By having proof of filing on time you can avoid late filing penalties. If you are using a private delivery service (e.g. DHL, FedEx etc.), you can use the following street address:

Ogden - Internal Revenue Submission Processing Centre
1973 Rulon White Blvd. 
Ogden, UT 84201
USA

Should you seek assistance in generating the electronic file or preparation of Form 1042, please do not to hesitate to contact us.

Extension Requests

In order for the extension request to be accepted you must file it with the IRS by March 15, 2019.

For an automatic 30-day extension of time to file Forms 1042-S, use Form 8809.

For an automatic 6-month extension of time to file Form 1042, use Form 7004. Please note that by filing Form 7004 you cannot extend the time to pay your taxes due. The deadline to pay your taxes remains unchanged.

You can complete and submit both forms online and file to the IRS electronically as follows: