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TAX FATCA-Luxembourg financial institutions permitted to apply a transition relief with respect to entity accounts opened in the second half of 2014 Background The Foreign Account Tax Compliance Act (FATCA) has started to apply as of 1 July 2014. What’s in there? The IRS has expressed that it will recognize good faith efforts made to comply with FATCA obligations. Furthermore, a transitional relief will be granted to Foreign Financial Institutions which will allow them to treat entity accounts opened in the period between 1 July 2014 and before 1 January 2015 as pre-ex- isting entity accounts. Following-up on that, ALFI and ABBL stated that the Luxembourg government recently informed them that Luxembourg financial institutions will be allowed to rely on the transitional relief for financial accounts held by entities.

What’s next? Mechanisms such as the transition period should serve to smoothen the transition process for FFIs and withholding agents and their compliance with FATCA requirements.

dorsed by the G20 countries in February 2014. Its purpose is to obtain detailed financial information from the signing jurisdiction’s financial institutions to be exchanged automatically with the other sign- ing jurisdictions on an annual basis. “Financial institutions”, which includes banks and some collective investment vehicles, will have to look through passive entities to collect and report the financial account information. The information to be reported encompasses bal- ances, interest, dividends, and sales proceeds from financial assets and covers accounts held by both individuals and entities, including trusts and foundations. The full version of the Standard contains detailed and practical rules on the exchange of informa- tion, including commentaries and guidance for implementation by governments and financial institutions, detailed model agreements and a standard format and requirements for secure transmission of data. At the moment, more than 65 countries, includ- ing Luxembourg and Switzerland joined the Standard and more than 40 committed to do so. What’s next? At the current state of affairs, it is expected that institutions will be required to implement the revised client identification and due diligence procedures by 1 January 2016 and start reporting from 2017.

THE IRS NOTICE 2014-33 IS AVAILABLE HERE.

OECD issues Global Standard for Automatic Exchange of Financial Account Information in Tax Matters Background On 21 July 2014, the OECD Council released the complete version of new global Standard for Au- tomatic Exchange of Financial Account Informa- tion in Tax Matters (the “Standard”). The Stand- ard will be formally presented to G20 Finance Ministers at their next meeting in September 2014. What’s in there? As a reminder, the basis of the Standard (the “Common Reporting Standard for Automatic Ex- change of Tax Information” - now contained in Part II of the full version) was presented and en-

THE STANDARD IS AVAILABLE HERE

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