World Council of Credit Unions issues summary of IRS FACTA final rule

The World Council of Credit Unions has released an eight-page summary of the Internal Revenue Service (IRS) final rule to implement the Foreign Account Tax Compliance Act (FATCA). 

The final rule makes several important changes to the IRS’s original proposal. The final rule clarified that credit unions fall within the definition of FATCA-exempt non-registering local banks. The rule also lets international credit unions list accounts on their websites using U.S. dollar denominations without losing FATCA-exempt status.

Other important parts of the final rule include:

• The IRS rule will not apply to non-U.S. credit unions in jurisdictions with most FATCA intergovernmental agreements
• U.S. credit unions will eventually be required to perform due diligence and tax withholding for overseas payments of not-yet-taxed U.S. sourced passive interest and investment income
• Non-U.S. credit unions that aren’t exempt will be subject to FATCA compliance and reporting by March 2015 and withholding in January 2017 or later.
• Accounts created before December 31, 2013 at participating FFIs are exempt from FATCA

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