Scanning No.1

European FATCA-like tax regime (CRS) and Savings Directive Background With respect to the OECD Common Reporting Standard (CRS), which is relatively similar to FATCA, it seems as if the EU Commission fully sup- ports the CRS. It is expected that the CRS will be implemented into the EU Directive on Administra- tive Collaboration before the end of 2014. As a re- sult, the scope of the existing EU Savings Directive should not be extended as initially planned. The revised EU Savings Tax Directive 2014/48/EU ('the Savings Directive') which was published on 15 April 2014 aims to reduce tax fraud and eva- sion by expanding the existing rules on exchange of information on savings income. The Savings Directive was adopted by the Council of the EU on 24 March and widens the scope of Directive 2003/48/EC. What’s in there? The European Commission’s Expert Group on Tax- ation of Savings met on 28 April 2014 to review the Amended Directive 2014/48/EU and to discuss the Organisation for Economic Co-operation and De- velopment’s (OECD) work on automatic exchange of information. The end of the implementation pe- riod of the directive on 1 January 2016 could be affected by an earlier implementation of CRS. The group’s mandate was extended to include data protection as well as legal issues. What’s next? The Commission is currently seeking data to sup- port the review. The Commission requested participation in an Ex- pert Group on removing tax problems for individ- uals who are active across borders within the EU. The Commission launched two public consulta- tions on cross border taxation of citizens in EU Member States and on cross-border inheritance taxation problems, both with a response date on 3 July 2014. FIND MORE INFORMATION HERE

What’s next? The IRS will continually update its FATCA - FAQs General section according to public interest. THE FAQ IS AVAILABLE HERE.

IRS publishes Notice 2014-33 Background Under FATCA, foreign financial institution (FFIs) which do not enter into an agreement with the IRS and do not carry on the relevant process’s adap- tation on time or which refuse to comply with the regulation will face a 30% withholding tax on US sourced income for payments made. What’s in there? On 2 May 2014, the US Department of Treasury and the IRS published Notice 2014-33. The following points are the most important parts of the Notice: « Calendar years 2014 and 2015 will be regard- ed as a transition period for purposes of IRS enforcement and administration with respect to the implementation of FATCA. This means that the IRS will take into account the extent to which FFIs are making a good faith effort to comply with FATCA and related mod- ifications to existing information reporting and withholding obligations until calendar year 2016. « FFIs may treat an obligation (including an ac- count) held by an entity that is opened, executed or issued on or after 1 July 2014 and before 1 January 2015, as a preexisting obligation. How- ever, the cut-off date for accounts held by indi- viduals remains 30 June 2014. This additional delay is granted due to the fact that the IRS has not yet published instructions regarding form W-8BEN-E, which is supposed to be used by lots of FFIs to document the entity account holders. What’s next? Mechanisms such as the transition period should help to smoothen the transition process for FFIs and withholding agents and their compliance with FATCA requirements. NOTICE 2014-33 IS AVAILABLE HERE.

TAX - BELGIUM FATCA Belgium signed an IGA with the US Background On April 23th, 2014, the Belgian Minister of Fi- nance and the US Treasury signed a IGA t o im- prove International Tax Compliance and to imple- ment FATCA. What’s in there? The IGA will help to improve international tax com- pliance by introducing a reciprocal automatic ex- change of information by the way of a reporting regime for financial institutions (Model 1 IGA). What’s next? Incorporation into Belgian law.

Scanning - June 2014 - page 7