ABA Cayman Conference: The Pros and Cons of OffShore Centres Preparing for FATCA Angela Foyle January 2014
FATCA timeline – the story so far 18 March 2010 FATCA added to Internal Revenue Code Various IRS FATCA notices published 2010 – 2011 15 Feb 2012 IRS publishes proposed regulations US Treasury releases model 1 IGA 26 July 2012 US Treasury releases model 2 IGA 14 Nov 2012 17 Jan 2013 FinalFATCARegulationsissued 09 Apr 2013 Five EU Member States agree to develop a pilot information exchange facility modelled on FATCA IGAs 26 Jun 2013 HMRC issues CDOTs Discussion Document Notice 2013-43 issued deferring deadlines by six months. Reporting on December 2013 year ends now no longer required 12 Jul 2013 IRSRegistrationwebsiteopensfor ‘dummy’ submissions 19 Aug 2013
FATCA TIMELINE (CONT.) 2014 Nov Jan Feb March April May June July Aug Sept Oct Dec Withholding begins on payments (other than in respect of grandfathered obligations ) for non IGA countries New account opening procedures to be in place Date for determining account balances and status of account holders First IRS FFI list to be published (of FFIs registered by 25 April 2014 Registration website starts accepting real submissions. GIINS start being issued All prima facie FFI accounts to be documented 1 Jan 2014 2 June 2014 1 July 2014 31 December 2014 30 June 2014 1 July 2014
FATCA TIMELINE (CONT.) 2015 Nov Jan Feb March April May June July Aug Sept Oct Dec All pre-existing high-value individual accounts to be documented First report to HMRC (on 31 December 2014 balances) for UK FFIs First reports to IRS are due (on 31 December 2014 US account balances) for non Model 1 countries Model 1 FFIs are required to have a GIIN 31 May 2015 1 Jan 2015 30 June 2015 31 March 2015
FATCA TIMELINE (CONT.) 30 June 2016 30 June 2016 All non prima facie FII accounts to be documented by this date All pre-existing non-high value individual accounts to be documented by this date NB1: Revisions to the final US FATCA Regulations are anticipated in January 2014 which will also lead to revisions to UK guidance and therefore potentially to guidance in other jurisdictions. NB2: Under the USA/Cayman Islands IGA, reporting to the IRS is within 9 months of the year end. However, the local authorities may stipulate an earlier deadline for submission, as in the case of the UK where the tax authorities are requesting information by 31 May as noted above, to enable completeness and other checks to be made
AIFMD timeline 22 July AIFMD Implemented 21 January Deadline for VoP (variation of permission) submission* 22 July Transitional arrangements cease 22 July ESMA guidance on whether 3rd party passport will be made available 22 October 3rd country passport regime commences subject to decision on 22 July 2014 2017 2015 2018 2013 2016 22 July review of operation of directive - AIFMD II 22 October expected date of possible termination of national private placement regime * Change announced on 19 December 2013 – timetable for applications for variations of permission (so for transitional firms extended until 22 July 2014).
LOCATION OF INTELLECUTAL PROPERTY CHANGE IN TRADE ? IME IMPACT ON STRUCTURE IMPACT ON REMUNERATION LOCATION OF INTELLECTUAL PROPERTY CROSS CHARGING AND TRANSFER PRICING AIFMD AND TAX PERMANENT ESTABLISHMENTS
TYPICAL STRUCTURE • Questions to be asked: • Who can be the AIFM? • what is investor? • what marketing will need to be done? • where are people • where is expertise • what an be delegated • will the “letterbox” rules apply • what co-operation agreements exist? • is an EU presence needed? • Should the structure be changed? • more than one manager and/or • fund? OFFSHORE Manager Feeder Fund Feeder Fund Sub advisory agreement Fund management agreement Master Fund EU adviser