Jersey's 'foreign financial institution' reporting system is now up and running.
Jersey’s financial institutions are now able to register in Jersey in preparation for the US Foreign Accounts Tax Compliance Act, which comes into force this year. FATCA requires financial institutions outside the USA to report information on financial accounts held by their US customers to the Internal Revenue Service (IRS) or, in the case of Jersey, to the Comptroller of Taxes who will pass it on to the Americans.
A test platform has been available to local financial institutions since last month to test their file formats and help them familiarise themselves with the FATCA return process. Now financial institutions can register on the live system and submit information required under the FATCA rules. The Comptroller of Taxes, acting as Jersey’s 'competent authority' under the inter-governmental agreement it signed on 13 December 2013, requires the information to be submitted by 30 June each year.
Financial institutions in Jersey should have already registered with the IRS in order to obtain a Global Intermediary Identification Number (GIIN). When registering in Jersey they must enter the GIIN and other information, including a designated point of contact. Someone in the Jersey Government - the Government's website does not say who - is writing up two sets of guidelines. The first are general and are to be the same as those from Guernsey and the Isle of Man.
More than 100 IGAs now exist between the US and other governments. This has not, however, stopped the IRS from relaxing various parts of its ultimata further. It now means to treat various countries as though they have IGAs in force even if they have not. In a circular issued in November, it said: "This announcement addresses these concerns by providing that a jurisdiction that is treated as if it had an IGA in effect, but that has not yet signed an IGA, retains such status beyond December 31, 2014, provided that the jurisdiction continues to demonstrate firm resolve to sign the IGA that was agreed in substance on or before June 30, 2014, as soon as possible. After December 31, 2014, Treasury [Americans never call it 'the Treasury'] will review the list of jurisdictions having an agreement in substance on a monthly basis to assess whether it continues to be appropriate to treat each jurisdiction included therein as if it had an IGA in effect or whether a jurisdiction should be removed from the list. This determination will be based on, among other factors, the responsiveness of a jurisdiction to communications from the United States regarding the IGA and whether the jurisdiction has raised concerns regarding its ability to sign or bring into force the text that was agreed to in substance."
The status of IGAs in American law is, of course, very uncertain, no such phenomena appearing in the text of FATCA. Various foreign financial institutions have begun reporting to the Americans but, according to figures released so far, not one jot of information has come the other way.