FATCA: IRS Clarifies New Deadlines: IRS Clarifies That Withholding on Payments Made to NFFEs Will Commence at the Same Time as Withholding on Payments Made to Nonparticipating FFIsSullivan & Cromwell LLP - July 26, 2011
On July 25, 2011, the Internal Revenue Service (the “IRS”) and Treasury Department issued an amended version of Notice 2011-53 (the “Revised Notice”), answering a question that was left open in the original version of Notice 2011-53 released on July 14, 2011 (the “Original Notice”). Notice 2011-53 announces the IRS and Treasury Department’s intended schedule for implementing the foreign account provisions (“FATCA”) of the Hiring Incentives to Restore Employment Act of 2010. The new information in the Revised Notice is that FATCA withholding on payments made to non-financial foreign entities (“NFFEs”) will take effect on the same schedule as withholding on payments made to foreign financial institutions (“FFIs”) that do not comply with FATCA’s reporting and withholding requirements (“nonparticipating FFIs”). The key effective dates under this schedule are:
- January 1, 2014, for payments of “fixed or determinable, annual or periodical income”, and
- January 1, 2015, for other “withholdable payments”.