What is FFI agreement?
What is FFI agreement?
This revenue procedure sets forth the agreement entered into by a foreign financial institution (FFI) with the Internal Revenue Service (IRS) to be treated as a participating FFI under section 1471(b) of the Internal Revenue Code (Code) and §1.1471-4 of the Income Tax Regulations (the FFI agreement).
What is a Model 1 FFI?
“Reporting Model 1 FFI” means an FFI or branch of an FFI that is treated as a reporting financial institution under an applicable Model 1 IGA and that has registered with the IRS to obtain a GIIN.
What is the difference between Model 1 and Model 2 FATCA?
Whereas, under Model 1, the “FATCA Partner” government is tasked with collecting information from resident Foreign Financial Institutions (“FFIs”) and reporting this to the IRS, Model 2 instead requires that FFIs register with the IRS by 1 January 2014 and comply with the requirements of an FFI Agreement with the US.
When does the FFI agreement apply to FFIs?
The FFI agreement in this revenue procedure will apply to FFIs with an FFI agreement effective on or after January 1, 2017. Section 2 of this revenue procedure provides background on the FFI agreement.
Can a model 1 FFI be a model 2 FFI?
The final Foreign Account Tax Compliance Act (FATCA) regulations regarding the FFI Agreement don’t pertain to Model 1 FFIs or any branch of a Model 1 FFI, unless the reporting Model 1 FFI has registered a branch located outside of a Model 1 IGA jurisdiction such that the branch may be treated as a participating FFI or reporting Model 2 FFI.
When did the IRS release model 2 FFI procedure?
On Dec. 26, 2013, the Internal Revenue Service released Revenue Procedure 2014-13 regarding foreign financial institutions (FFIs) entering into an FFI Agreement (participating FFIs) and FFIs and their branches that are treated as reporting financial institutions under an applicable Model 2 intergovernmental agreement (IGA) (reporting Model 2 FFIs).
How does a FFI comply with FATCA regulations?
FFIs are encouraged to either directly register with the IRS to comply with the FATCA regulations (and FFI agreement, if applicable) or comply with the FATCA Intergovernmental Agreements (IGA) treated as in effect in their jurisdictions.