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The US Treasury and the IRS released on 20 February 2014 two key updates to FATCA and related regulations.  The first one related to Final and temporary regulations for FATCA.

These regulations (together with the update for Coordinating Regulations for Chapters 3, 4 and 61) are lengthy (over 550 pages) and contain numerous changes that will likely impact how FATCA is implemented by foreign financial institutions around the world.  PwC will provide a detailed analysis shortly.  In the meantime, please see the high level summary below. 

Final and temporary regulations for FATCA 

The regulations contain over 50 discrete amendments and clarifications to the FATCA regulations issued in January 2013 to provide clarifications and to take into account certain stakeholder suggestions regarding ways to further reduce burdens consistent with FATCA's compliance objectives.  Modifications to the final regulations are also intended to harmonize FATCA with the approach taken in the IGAs (Intergovernmental Agreements). 

Key amendments and clarifications include those relating to: 

•        The accommodation of direct reporting to the IRS, rather than to withholding agents, by certain entities regarding their substantial US owners 

•        The treatment of certain special-purpose debt securitization vehicles 

•        The treatment of disregarded entities as branches of foreign financial institutions 

•        The definition of an expanded affiliated group 

•        Transitional rules for collateral arrangements prior to 2017