The CRS Guidance and the New FFI Agreement

CRS

Release of the final version of the AEOI Guidelines on the International Automatic Exchange of Information on Tax Matters for Swiss Financial Institutions

On January 18 2017, the Swiss FTA published the final version of the Guidelines on the International Automatic Exchange of Information on Tax Matters. The Guidelines include only minor changes in comparison with the latest draft version published in November 2016.

Updated Definition of a Participating Jurisdiction

On January 1, 2017 the Swiss AEOI Ordinance entered into force. The ordinance includes provisions related to the interpretation of the AEOI requirements by Swiss reporting financial institutions and clarifies several definitions introduced with CRS. 

Part of the clarification is the definition of a Participating Jurisdiction, which has been expanded to cover all jurisdictions committed to implement the AEOI according to the OECD Global Forum on Transparency and Exchange of Information for Tax Purposes. As a result of this change, self-declaration forms already in use which do not contain the updated definitions have to be renewed accordingly. The need to update the self-declaration forms has also been emphasized in SBA circular Nr. 7911 December 8, 2016 (accessible with a password).

FATCA

New FFI Agreement 

On January 10, 2017 the IRS published the new FFI Agreement (Rev. Proc. 2017-16), replacing the FFI Agreement currently in place (Rev. Proc 2014-38), which expired on December 31, 2016.

The most significant changes to the FFI Agreement are the following:

• Clarifications regarding the application of the FFI Agreement to Branches of Model 2 Reporting FFIs;

• Updates reflecting the expiration of limited FFI and limited branch statuses on December 31, 2016;

• New provisions requiring the performance of a final certification of compliance when terminating the FFI Agreement;

• Minor corrections and clarifications of certain provisions applicable to reporting Model 2 FFIs.

The deadline for the renewal of the FFI Agreement is July 31, 2017. An FFI seeking the renewal of the FFI Agreement will be able to do so beginning May 2017 via the FATCA Registration Website. The FFI Agreement will be valid retroactively from January 1, 2017.

FATCA Qualification Committee Updates

The FATCA Qualification Committee of the State Secretariat for International Financial Matters (SIF) published updated assessments on FATCA-related matters which include:

• Updated definitions of the terms “Portfolio Management” and “Professionally Managed” under FATCA with respect to investment entities.

• Assessment on the legitimacy of signing a self-declaration by minors. Minors will be able to fill out and sign the self-declaration themselves, if they are capable of acting according to civil law.

• New guidance on the treatment of the repayment of capital contributions for reporting purposes

• New guidance on the reporting of foreign reportable payments to NPFFIs. 

QI

New QI, WP and WT Application and Account Management System

On January 17, the IRS launched a new QI, WP and WT Application and Account Management System. The new system allows QIs, WPs and WTs to submit and make updates to their QI, WP, or WT applications, as well as to renew their QI, WP and WT agreements.

Updated Withholding Foreign Partnership and Withholding Foreign Trust Agreements

On January 19, 2017 the IRS published updated agreements for Withholding Foreign Partnerships and Withholding Foreign Trusts in order to reflect recent regulatory changes.