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IRS Finalizes Intergovernmental FATCA Data Exchange Format

by Mike Godfrey, Tax-News.com, Washington

27 December 2013


The United States Internal Revenue Service (IRS) has finalized the format for automatically exchanging data collected under the Foreign Account Tax Compliance Act (FATCA) data with jurisdictions that have signed an intergovernmental agreement (IGA).

The IGA FATCA XML Schema, posted on the IRS website, is a standard format developed in close cooperation with the OECD, captures required information for reporting of FATCA data from both Foreign Financial Institutions (FFIs) and Host Country Tax Administrations (HCTAs), and will be used for automatic exchange with all FATCA jurisdictions.

The Schema uses elements from existing reporting schemas used by the OECD and the European Union to reduce the burden on reporting entities; uses XML to allow for easier modifications down the road in the event of legislative or regulatory changes in reporting rules; and will facilitate safe and secure electronic data transmission using the International Data Exchange Service (IDES).

The IRS is finalizing IDES to allow for FFIs and HCTAs to exchange FATCA data automatically with the US. It will also allow the US to make reciprocal exchanges where called for by an IGA that is in force.

It is said that IDES: is based on business requirements collected by a multilateral working group; serves as a single point of FATCA information delivery for both FFIs and HCTAs; may be used for automatic exchange with all FATCA jurisdictions; is based on readily-available mature technology; and requires both the file being sent (in the IGA FATCA XML Schema) and the transmission pathway to be encrypted, ensuring the security of tax data.

TAGS: compliance | Institutions | Foreign Account Tax Compliance Act (FATCA) | tax | tax compliance | FATCA | banking | financial services | Internal Revenue Service (IRS) | tax authority | United States | services | Compliance | Tax

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