• Marco Zawar MBA/LLM (Tax)

FATCA - Missing U.S. TIN and the exchange of Financial Account Information


The General Secretariat of the Council of the European Union (Council Secretariat) on 11 December 2019 published a letter they have sent to the U.S. Treasury Secretary, Steven Mnuchin.

Beside the long lasting discussion how to treat U.S. Citizens living abroad and to ease their FATCA burden the Council Secretariat raised some concerns about the updated FATCA - FAQs General Question 3 within Reporting section regarding the missing U.S Tax Identification Number (TIN).

Based on the updated of Question 3 IGA Model 1 Financial Institutions are not required to immediately close or withheld on accounts held by U.S Taxpayers that does not contain a U.S. TIN beginning January 1, 2020 and that such financial institutions will not automatically treated as significant non-compliant under FATCA.

The Council Secretariat identified some uncertainties as the final decision whether or not an IGA-1 Model Financial Institution will be classified as non-compliant depends on discretion of the U.S Internal Revenue Service IRS.

Therefore the Council Secretariat recommended that the IRS provide further guidance to such situations where financial institutions not been able to obtain the U.S TIN.

Finally the Council Secretariat highlighted the lack of equivalent reciprocity in the exchange of financial account information between the United States and the EU Member States.

Authors note:

The United States has signed 113 IGA’s.

The IGA’s are classified into

Source: U.S Department of the Treasury - IGA country list

It is essential to point out that the tax authorities in IGA jurisdictions (IGA-1 and IGA-2) are obliged to provide fare more detailed information about U.S Taxpayers and their financial accounts as they receive conversely from the IRS.

It should further be noted, that the United States as a major financial center has not yet committed to the OECD Common Reporting Standard.

The reporting standard was introduced by the OECD in 2014 and meanwhile more than 100 jurisdictions agreed to exchange financial account information under this standard.

©2019 by Marco Zawar