Financial Institutions to ensure US TIN for pre-existing accounts is reported

All Indian Reporting Financial Institutions (RFIs) are to ensure that the United States Tax Identity Number (TIN) is reported of each pre-existing account for the year 2017 onwards, in compliance of the Inter-Governmental Agreement (IGA) signed between India and United States under Foreign Account Tax Compliance Act (FATCA), CBDT notified on 15 January.

Pre-existing accounts are the reportable accounts held by a reportable person as of June 30, 2014.

In the agreement, both the countries decided to establish, by January 1, 2017, rules requiring their RFIs to obtain the TIN of each reportable person holding a pre-existing account, in order to enhance the effectiveness of information exchange and transparency.

Accordingly, the US- Internal Revenue Service (IRS) has issued guidelines through Notice 2017-46 dated September 25, 2017 providing relaxation to Foreign Financial Institutions (FFIs) with respect to reporting of U.S.TIN for calendar years 2017, 2018 and 2019.

Now the Competent Authority of USA will not determine significant non-compliance with the obligations under the IGA solely because of a failure of a reporting FFI to obtain and report each required U.S.TIN, provided that the reporting FFI:

(i) obtains and reports the date of birth of each account holder and controlling person whose U.S. TIN is not reported;

(ii) requests annually from each account holder any missing required U.S. TIN; and

(iii) before reporting information that relates to calendar year 2017 to the partner jurisdiction, searches

electronically searchable data maintained by the reporting FFI for any missing required U.S. TINs.

In case of non- availability of the U.S.TIN, the CBDT advised the RFIs to insert nine capital letters e.g. (i.e. AAAAAAAA) in the TIN field (for the Account Holder or Controlling Person, as the case may be), for such accounts in their reports in Form 61B, provided that all the three conditions listed above are met. 

-ANI