The document outlines the key components of the Foreign Account Tax Compliance Act (FATCA), detailing requirements for foreign financial institutions (FFIs) and non-financial foreign entities (NFFEs) regarding U.S. account holders to prevent tax evasion. It addresses the classification of FFIs, the types of entities involved, and the implications of non-compliance, such as a 30% withholding tax. The document also discusses Intergovernmental Agreements (IGAs) that facilitate compliance with local laws while reporting to the IRS.

1. FATCA ESSENTIALS
CLIENT WEBINAR SERIES

2. 2
Disclaimer
Any U.S. tax advice contained in this communication (including
attachments) is not intended or written to be used, and cannot be used,
for the purpose of (I) avoiding penalties under the internal revenue code;
or (II) promotions, marketing or recommending to another party any
transactions or tax-related matters addressed herein.
If you have any questions, please contact 212.697.1000.

3. Today’s Presenters
3
F. Wayne Holton, CPA
International Tax Partner
Paul Dailey, CPA, MBA
International Tax Partner
Andrew Rotter, JD, CPA
International Tax Partner
Jeff Slavet, JD, CPA, LLM
International Tax Partner

4. Introduction To & The Basics Of
FATCA
4

5. 5
Chapter 4 Status
Chapter 4, sections 1471-1474 was added to the Internal Revenue Code in
2010 as part of the HIRE Act. Chapter 4 requires FFI’s to identity US account
holders and to report them to the IRS. Additionally, non FFI’s, known as non-
financial foreign entities (NFFE) are required to provide information related to
the identity of substantial US owners which are generally holders of greater
than 10% of the NFFE.
FFI’s and NFFE’s that do not comply with the requirements of chapter 4 will be
subjected to a 30% withholding tax on payments made to them of certain US
sourced FDAP, as well as beginning on January 1, 2017 gross proceeds from
the sale or other disposition of debt and equity instruments. FFI’s that are not
compliant will be deemed to be nonparticipating FFI’s.
Form W8-BENE has listed 31 different Chapter 4 status’ under
FATCA. Depending on the category that an entity falls under, that will
determine which sections of the form needs to be completed.

6. What is a FFI?
6

7. 7
FFI: Foreign Financial Institution
The definition of a FFI (Foreign Financial Institution) is one of the most critical threshold issues when analyzing the impact of FATCA
Must first be a foreign entity
 Any entity that is not a U.S. person
Types of Financial Institutions
• Banks – Depository Institutions
• Custodial Institutions
• Investment entities
• Entities that conduct certain enumerated investment management activities on behalf of customers.
• Professionally managed entities exceeding gross income thresholds for certain activities. At least 50% during a
measurement period.
• Holding themselves out as collective investment vehicles or similar products.
• Insurance Companies
• Holding Companies or Treasury Centers
Exclusions
• Excepted nonfinancial group entities
• Excepted nonfinancial start-up companies
• Excepted nonfinancial entities in liquidation or bankruptcy
• Excepted inter-affiliated FFI’s
• Sec. 501(C) entities
• Nonprofit organizations

8. 8
Polling Question #1
A foreign entity that invests in a U.S. hedge fund and that pays a
management fee to an investment entity is a FFI.
 True
 False

9. If not a FFI, then what?
9

10. 10
NFFE: Non-Foreign Financial Entity
30% withholding tax applies unless NFFE provides certification regarding Chapter 4 status and U.S. owners, if applicable.
EXCEPTED ENTITIES
• Excluded entities (see discussion re: FFI’s )
• Publicly Traded Company, including affiliates
• Active NFFE’s
 50% (less than) gross income and asset measurement-TRADE or BUSINESS ACTIVITIES OTHER THAN
• Dividends
• Interest
• Equivalents
• Rents & Royalties (other than active conduct by employees)
• Annuities
• Sale or exchange of Passive Assets
• Futures, forward transactions, etc.
• Sec. 988 transactions
• Notional principal contracts
• Cash value insurance contracts
• Certain Insurance company income relating to its reserves
• Territory Entities
OTHERWISE
Will be classified as a passive NFFE
• Direct Reporting NFFE’s

11. 11
Polling Question # 2
A foreign entity that is engaged in an active trade or business outside of
the U.S. is not a NFFE.
 True
 False

12. Form W-8 BEN-E Glossary
12

13. 13
Common Terms 1
FATCA- The Foreign Account Tax Compliance Act, enacted as part of the HIRE act which added Chapter 4 to
the internal revenue code to enforce offshore account compliance.
Foreign Financial Institution (FFI)- A financial institution that is a non US entity. The regulations identify
basic types of financial institutions which include depository institutions (banks), custodial institutions (mutual
funds), investment entities (hedge funds and private equity funds), and certain insurance companies that have
cash value or annuity products.
Global Intermediary Identification Number (GIIN)- This is a number assigned to a participating FFI (PFFI),
registered deemed compliant FFI, direct reporting Non-Financial Foreign Entity (NFFE) to identify such
entities having been registered and approved to withholding agents and the IRS.
Non-Financial Foreign Entity (NFFE)- An entity organized outside the U.S. that is not a financial institution.
FDAP Income- Fixed or determinable, annual or period income. This includes interest, dividends, gross
proceeds (beginning 1/1/17) from the sales of property that can produce interest or dividends.
Expanded Affiliated Group (EAG)- Group of entities that are connected to each other through common
ownership. The FATCA status of members of the EAG can affect the FFI’s in the group to be FATCA
compliant.
Withholdable Payment- A payment subject to withholding under Chapter 4. Including payments of FDAP
income made after June 30, 2014 and the gross proceeds from the disposition of after December 31, 2016.

14. 14
Common Terms 2
Active NFFE — An NFFE that is treated as an excepted NFFE because it satisfies requirements that both its income and its assets are
predominantly active.
Certified deemed-compliant FFI — An FFI that is treated as complying with FATCA without being required to register with the IRS or
enter into an FFI agreement.
Deemed-compliant FFI — An FFI that is treated as FATCA compliant without being required to enter into an FFI agreement. Deemed-
compliant FFIs may be registered deemed-compliant FFIs (which are required to register with the IRS) or certified deemed-compliant
FFIs (which are not required to register with the IRS).
Limited FFI — An FFI that is in the same EAG as a PFFI and is located in a jurisdiction the laws of which do not permit it to comply with
the PFFI agreement (and that does not otherwise qualify as a deemed-compliant FFI or exempt beneficial owner). For a limited time, a
PFFI may have limited FFI affiliates if the PFFI follows certain procedures with respect to such limited FFI affiliates.
Owner-documented FFI — An investment entity FFI that, by virtue of satisfying certain requirements, is eligible to provide information
regarding its owners that are specified U.S. persons to certain designated withholding agents that then agree to report to the IRS (or to
anon-U.S. government under a Model 1 FFI) with respect to any specified U.S. persons identified.
Passive NFFE — An NFFE that does not satisfy the requirements of any of the categories of excepted NFFEs. When a passive NFFE
receives withholdable payments, it must certify either that (i) it has no substantial U.S. owners, or (ii) if it does have substantial U.S.
owners, identify each substantial U.S. owner.
Preexisting account — A financial account maintained by a financial institution that is outstanding on June 30, 2014. However, with
respect to entity accounts, a financial institution may treat an account outstanding on December 31, 2014 as a preexisting account.

15. Customer Identity
for FATCA Compliance:
Simplified
15

16. 16
Payee Identification Procedures
In simple terms, the hallmark of the FATCA provisions is to attempt to identify U.S. investors/ owners
of foreign entities so as to minimize/ prevent tax evasion. Withholding agents must report ( both to the
payee and IRS), withhold, and deposit any withheld tax as required. Reporting entails the
identification of the payee and the character and source of payments.
Chapter 4, unlike chapters 3 and 61, imposes withholding on the payee whether or not the payee is
the beneficial owner of the income being paid. The payee is defined as the person to whom a payment
is made. The holder of a financial account is the payee if the payment is being made to a financial
account unless an exception applies. Relevant exceptions are as follows:
• Payments to Non-U.S. Agents and Intermediaries
• Payments to Non-U.S. Flow-Through Entities
• Payments to U.S. Intermediaries or Agents
• Payments to Disregarded Entities and Branches
After the determination of the payee, the withholding agent must obtain the appropriate documentation
or apply the presumption rules so as to determine the payee’s chapter 4 status. FATCA still relies on
Forms W-8 and W-9 as the primary form of documentation. FATCA, however, expands on the
permitted documents available for a payee to present to a withholding agent to document its status in
lieu of or in conjunction with Forms W-8 and W-9. Our professional advice, however, is that a properly
completed Form W-8 or W-9, is still the preferred form of documentation in almost all situations.

17. IGA:
Intergovernmental Agreements
17

18. 18
IGA: Intergovernmental Agreement
These are bilateral agreements between the US Treasury Department and other
countries. These agreements were created to allow FFI’s to comply with section 4 and still be
in compliance with their local laws.
Model 1 IGA
• These require that an FFI that is organized in a FATCA partner country report information
regarding US accounts to the FFI’s own tax authorities which then forward such information
to the IRS.
• Reporting model 1 FFI’s are also required to register with the IRS. They are then
considered to be registered deemed compliant FFI’s.
Model 2 IGA
• These require that an FFI comply with Chapter 4, and to enter into an agreement directly
with the IRS and to report to the IRS with respect to their US accounts.
• Reporting model 2 FFI’s are considered to be participating FFI’s (PFFI). These entities are
then subject to extensive reporting to prevent offshore tax evasion by US account holders.

19. IGA Country Summary
19
Model 1 IGA Model 2 IGA
Australia (4-28-2014)
Belgium (4-23-2014)
Brazil (9-23-2014)
British Virgin Islands (6-30-2014)
Canada (2-5-2014)
Cayman Islands (11-29-2013)
Costa Rica (11-26-2013)
Czech Republic (8-4-14)
Denmark (11-19-2012)
Estonia (4-11-2014)
Finland (3-5-2014)
France (11-14-2013)
Germany (5-31-2013)
Gibraltar (5-8-2014)
Guernsey (12-13-2013)
Hungary (2-4-2014)
Honduras (3-31-2014)
Ireland (1-23-2013)
Isle of Man (12-13-2013)
Israel (6-30-2014)
Italy (1-10-2014)
Jamaica (5-1-2014)
Jersey (12-13-2013)
Latvia (6-27-2014)
Liechtenstein (5-19-2014)
Lithuania (8-26-2014)
Luxembourg (3-28-2014)
Malta (12-16-2013)
Mauritius (12-27-2013)
Mexico (4-9-2014)
Netherlands (12-18-2013)
New Zealand (6-12-2014)
Norway (4-15-2013)
South Africa (6-9-2014)
Spain (5-14-2013)
Slovenia (6-2-2014)
Sweden (8-8-2014)
United Kingdom (9-12-2012)
Austria (4-29-2014)
Bermuda (12-19-2013)
Chile (3-5-2014)
Japan (6-11-2013)
Switzerland (2-14-2013)*
*Note: Switzerland is
currently a Model 2 IGA,
but is set to become a
Model 1 IGA.

20. Jurisdictions with Agreements in Substance
20
Model 1 IGA Model 2 IGA
Algeria (6-30-2014)
Anguilla (6-30-2014)
Antigua & Barbuda (6-3-
2014)
Azerbaijan (5-16-2014)
Bahamas (4-17-2014)
Bahrain (6-30-2014)
Barbados (5-27-2014)
Belarus (6-6-2014)
Bulgaria (4-23-2014)
Cabo Verde (6-30-2014)
China (6-26-2014)
Colombia (4-23-2014)
Croatia (4-2-2014)
Curaçao (4-30-2014)
Cyprus (4-22-2014)
Dominica (6-19-2014)
Dominican Republic (6-30-
2014)
Georgia (6-12-2014)
Greenland (6-29-2014)
Grenada (6-16-2014)
Guyana (6-24-2014)
Haiti (6-30-2014)
India (4-11-2014)
Indonesia (5-4-2014)
Kosovo (4-2-2014)
Kuwait (5-1-2014)
Malaysia (6-30-2014)
Montenegro (6-30-2014)
Panama (5-1-2014)
Peru (5-1-2014)
Poland (4-2-2014)
Portugal (4-2-2014)
Qatar (4-2-2014)
Romania (4-2-2014
St. Kitts and Nevis (6-4-
2014)
St. Lucia (6-12-2014)
St. Vincent and the
Grenadines (6-2-2014)
Saudi Arabia (6-24-2014)
Serbia (6-30-2014)
Seychelles (5-28-2014)
Singapore (5-5-2014)
Slovak Republic (4-11-2014)
South Korea (4-2-2014)
Thailand (6-24-2014)
Turkey (6-3-2014)
Turkmenistan (6-3-2014)
Turks and Caicos Islands (5-
12-2014)
Ukraine (6-26-2014)
United Arab Emirates (5-21-
2014)
Uzbekistan (6-30-2014)
Armenia (5-8-2014)
Hong Kong (5-9-2014)
Iraq (6-30-2014)
Nicaragua (6-30-2014)
Moldova (6-30-2014)
Paraguay (6-6-2014)
San Marino (6-30-2014)
Taiwan (6-23-2014)*

21. What is a GIIN?
21

22. 22
What is a GIIN
GIIN is a Global Intermediary Identification Number. These numbers are
assigned to participating FFI’s (PFFI) and registered deemed compliant FFI’s.
Each GIIN assigned is a 19 digit character that is composed of
multiple identifiers.
The first 6 digits are a randomly generated alpha numeric
string. They are all upper case letters, excluding the letter “O” and numbers or
a combination of both. (See composition ledger as prepared by the treasury
department).
FATCA and GIIN registration should be done on the following
website: www.irs.gov/fatca-registration.
For additional information there is a FATCA user guide available at
www.irs.gov/pub/irs-pdf/p5118.pdf.

23. 23
Character Representation # of Char. Position Description/ Rules
XXXXXX
FATCA ID (first six characters)
6 1-6 Alphanumeric upper case only.
For all Financial Institutions, this is the same as the first 6
characters of the FATCA ID. For leads and singles, this is your
FATCA ID, for members, this is just the first six characters.
(First 6 characters of any Financial Institution’s FATCA ID are
randomly generated and will never use the letter “O”)
Separator 1 1 7 Period = .
XXXXX
Financial Institution Type
5 8-12 Alphanumeric upper case only.
Lead = 00000; Sponsoring Entity = 00000; Single = 99999
Member = Same as the last 5 characters of the Member’s
FATCA ID (sequential, starting from 00001 and going to 99998,
then A0000- ZZZZZ; will never use the letter “O”)
Separator 2 1 13 Period = .
XX
Category Code
2 14-15 Alpha upper case only.
Based on Financial Institution or Branch Category
LE = Lead; SL = Single; ME = Member; SP = Sponsoring Entity;
BR = Branch (the first 13 characters of a branch’s GIIN will
match the first 13 characters of the GIIN of the Financial
Institution with which the branch is associated)
Separator 3 1 16 Period = .
XXX
Country Identifier
3 17-19 Numeric.
ISO 3166-1 numeric standard country code of the Financial
Institution or Branch
NOTE: Use 999 for country code “Other”

24. Treaty Benefits
for a Non-Financial Company
24

25. 25
Treaty Benefits
Traditionally, a Form W-8 BEN was utilized by foreign persons to claim treaty
benefits. With the onslaught of the new FATCA provisions, one must not forget,
however, that such is still the case.
A withholding agent may rely on a properly completed Form W-8 BEN-E to apply a
reduced rate of, or exemption from withholding pursuant to applicable treaty
provisions. If the payee receives certain types of income, they must provide Form
W-8BEN-E to:
• Claim that they are the beneficial owner of the income AND
• If applicable, claim a reduced rate of, or exemption from withholding as a
resident of a foreign country with which the U.S. has an income treaty that is
eligible for treaty benefits.
Other than for dividends and interest from stocks and debt obligations that are
actively traded, the foreign payee should complete Part I, Line 9b Foreign TIN.
Part II should be completed in such context. Special attention must be paid to any
Limitations of Benefits Article ( Line 14b ).

26. 26
Polling Question #3
If the payee receives certain types of income, they must provide Form W-
8BEN-E to:
 Claim that they are the beneficial owner of the income
 Claim a reduced rate or exemption from withholding
 All of the Above

27. FATCA Essentials for the Future
27

28. 28
FATCA Essentials for the Future
DDPPI
 Documentation
 Diligence
 Policies
 Procedures
 Implementation
Completion of Forms including W-8BEN-E
 Expiration- Generally, will remain valid for a period of three years
• Indefinite validity , however, unless there is a change of circumstances,
See Reg. Sec.1.1471-3(c) (6)(ii)
– Provided by a participating FFI or registered deemed –compliant
FFI that has furnished a valid GIIN
– Provided by an individual that has furnished documentary evidence
supporting claim of foreign status
Registration
FATCA Timeline

29. FATCA Reporting Timeline
29
Year When to Report Who Should Report What to Report
2015 March 31 FFIs in non-IGA jurisdictions and
FFIs in Model 2 IGA jurisdictions
With respect to 2014:
1. Account holder’s name. For passive non-financial foreign entity, the
name(s) of any substantial U.S. owners.
2. Account holder’s U.S. taxpayer identification number (TIN). For
passive non-financial foreign entity, only the TIN(s) of any substantial
U.S. owner(s).
3. Account holder’s address. For passive non-financial foreign entity, only
the address(es) of substantial U.S. owner(s).
4. Account number.
5. Account balance or value.
6. For accounts held by recalcitrant/ non-consenting account holders:
report aggregate number and balance or value.
September 30 FFIs in Model 1 IGA jurisdictions
2016 March 31 FFIs in non-IGA jurisdictions and
FFIs in Model 2 IGA jurisdictions
With respect to 2015:
1-6. (See above)
7. Income paid (except certain gross proceeds from the sale or
redemption of property).September 30 FFIs in Model 1 IGA jurisdictions
2017 March 31 FFIs in non-IGA jurisdictions and
FFIs in Model 2 IGA jurisdictions
With respect to 2016:
1-7. (See above)
8. Gross proceeds paid to custodial accounts.
September 30 FFIs in Model 1 IGA jurisdictions
After
2017
March 31 FFIs in non-IGA jurisdictions and
FFIs
With respect to previous year:
1-8. (See above)
September 30 FFIs in Model 1 IGA jurisdictions

30. Today’s Presenters
30
F. Wayne Holton, CPA
International Tax Partner
fholton@citrincooperman.com
Paul Dailey, CPA, MBA
International Tax Partner
pdailey@citrincooperman.com
Andrew Rotter, JD, CPA
International Tax Partner
arotter@citrincooperman.com
Jeff Slavet, JD, CPA, LLM
International Tax Partner
jslavet@citrincooperman.com

31. CONNECTICUT | NEW JERSEY | NEW YORK | PENNSYLVANIA
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