|By PR Newswire||
|August 8, 2014 02:45 PM EDT||
DALLAS, Aug. 8, 2014 /PRNewswire/ -- In an effort to combat tax evasion by US taxpayers through undisclosed offshore investments, the United States Congress ("Congress") adopted the Foreign Account Tax Compliance Act (FATCA) March 18, 2010 as a part of the Hiring Incentives to Restore Employment Act. Under the FATCA, financial institutions across the world are required to register with the US tax authorities (Internal Revenue Service) and report, on an annual basis, specific details of their US clients and interest holders. Should a foreign financial institution fail to do so, the FATCA imposes a 30% withholding tax on most US payments to such noncompliant institutions. The requirements to submit such information and for US payors to start withholding the aforementioned tax entered into force on July 1, 2014.
Effectively, the FATCA requires all non-US financial institutions to contribute to Congress's effort to increase US tax revenue on offshore investments. Because such investments may vary in shape and size, the FATCA's impact extends beyond "traditional" investment managers such as banks and funds. Under the FATCA, all non-US recipients of US source payments will need to assess their FATCA status, which they are required to disclose to the payor when receiving a US source payment.
Unsurprisingly, we have seen a wide variety of objections to the FATCA. One argument against the FATCA relates to the fact a non-US financial institution may be violating its local laws when it is effectively forced to submit its clients' information directly to a foreign government (i.e., the United States). Another argument is that the FATCA in itself is a unilateral effort by the US, offering no room for the receipt of information by a foreign government. Moreover, the FATCA was initially only written in US domestic laws and Treasury regulations, containing broad definitions to ensure that no US tax would be avoided through alternative investment avenues. As a result, no foreign government had any formal opportunity to consult with the United States regarding specific types of business in its country that would have a minimal risk to be used for tax avoidance purposes by the United States. In recognition of a number of legal and practical arguments against the FATCA, the US in 2012 first announced that it had started engaging with more than 50 countries to enter into so-called Intergovernmental Agreements (IGAs) with respect to the FATCA. On December 18, 2013, the Netherlands signed the Intergovernmental FATCA Agreement between the Netherlands and the United States.
As described, the US domestic laws relating to the FATCA require that financial institutions report information regarding US investors directly to the Internal Revenue Service (IRS). Under the IGA, however, financial institutions will report the information to the Dutch tax authorities, which will subsequently exchange the information with the IRS under Article 30 of the US-Netherlands tax treaty. Arguably, this two-step approach invalidates legal objections against Dutch financial institutions directly providing the US government with information regarding their clients and interest holders.
On another note, the Dutch government has been able to limit the scope of the FATCA to a certain extent during negotiations of the IGA with the United States, as Dutch pension funds are deemed compliant financial institutions under the IGA (and as a result, not subject to FATCA reporting requirements).
Finally, the Dutch-US IGA contains a reciprocity provision in Article 6, Paragraph 1, in which the United States acknowledges the need for the reciprocal exchange of information by implementing legislation that would enable the exchange of information on equal footing. However, while the Netherlands specifically commits to implement national laws that enable FATCA reporting, the United States makes no such commitment vis-à-vis the Netherlands under the IGA.
Under the IGA, both states intend to commence the automatic exchange of information in 2015, with respect to the 2014 fiscal year. The legislative proposal and the explanatory memorandum that would convert the obligations to the Netherlands under the IGA into Dutch domestic law have been submitted with the Dutch Parliament. The goal is to complete the ratification and implementation process before September 30, 2015, when the first exchange of information is scheduled to take place.
Interestingly, all Dutch financial institutions are considered FATCA-compliant during the time in which the Netherlands is in the process of enacting legislation that allows it to comply with its obligations under the IGA (principally, laws that allow it to submit information from Dutch financial institutions to the IRS). Notwithstanding this deemed FATCA compliance, however, Dutch financial institutions should still collect the relevant FATCA information of their clients and interest holders that relates to 2014, as they are required to submit it to the Dutch authorities once the Dutch legislation relating to the FATCA comes into effect in 2015.
If you would like to receive more information on how your business may be impacted by this IGA or the FATCA in general, please contact a Ryan International Tax professional.
Without a clear strategy for cost control and an architecture designed with cloud services in mind, costs and operational performance can quickly get out of control. To avoid multiple architectural redesigns requires extensive thought and planning. Boundary (now part of BMC) launched a new public-facing multi-tenant high resolution monitoring service on Amazon AWS two years ago, facing challenges and learning best practices in the early days of the new service. In his session at 19th Cloud Exp...
Feb. 20, 2017 10:15 PM EST Reads: 3,289
For basic one-to-one voice or video calling solutions, WebRTC has proven to be a very powerful technology. Although WebRTC’s core functionality is to provide secure, real-time p2p media streaming, leveraging native platform features and server-side components brings up new communication capabilities for web and native mobile applications, allowing for advanced multi-user use cases such as video broadcasting, conferencing, and media recording.
Feb. 20, 2017 10:15 PM EST Reads: 5,893
WebRTC is about the data channel as much as about video and audio conferencing. However, basically all commercial WebRTC applications have been built with a focus on audio and video. The handling of “data” has been limited to text chat and file download – all other data sharing seems to end with screensharing. What is holding back a more intensive use of peer-to-peer data? In her session at @ThingsExpo, Dr Silvia Pfeiffer, WebRTC Applications Team Lead at National ICT Australia, looked at differ...
Feb. 20, 2017 10:15 PM EST Reads: 6,178
"Plutora provides release and testing environment capabilities to the enterprise," explained Dalibor Siroky, Director and Co-founder of Plutora, in this SYS-CON.tv interview at @DevOpsSummit, held June 9-11, 2015, at the Javits Center in New York City.
Feb. 20, 2017 09:15 PM EST Reads: 4,476
With major technology companies and startups seriously embracing IoT strategies, now is the perfect time to attend @ThingsExpo 2016 in New York. Learn what is going on, contribute to the discussions, and ensure that your enterprise is as "IoT-Ready" as it can be! Internet of @ThingsExpo, taking place June 6-8, 2017, at the Javits Center in New York City, New York, is co-located with 20th Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry p...
Feb. 20, 2017 09:15 PM EST Reads: 872
Security, data privacy, reliability and regulatory compliance are critical factors when evaluating whether to move business applications from in-house client hosted environments to a cloud platform. In her session at 18th Cloud Expo, Vandana Viswanathan, Associate Director at Cognizant, In this session, will provide an orientation to the five stages required to implement a cloud hosted solution validation strategy.
Feb. 20, 2017 08:45 PM EST Reads: 4,308
SYS-CON Events announced today that CA Technologies has been named "Platinum Sponsor" of SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, New York, and 21st International Cloud Expo, which will take place in November in Silicon Valley, California.
Feb. 20, 2017 08:30 PM EST Reads: 1,483
The security needs of IoT environments require a strong, proven approach to maintain security, trust and privacy in their ecosystem. Assurance and protection of device identity, secure data encryption and authentication are the key security challenges organizations are trying to address when integrating IoT devices. This holds true for IoT applications in a wide range of industries, for example, healthcare, consumer devices, and manufacturing. In his session at @ThingsExpo, Lancen LaChance, vic...
Feb. 20, 2017 07:00 PM EST Reads: 8,217
SYS-CON Events announced today that delaPlex will exhibit at SYS-CON's @CloudExpo, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. delaPlex pioneered Software Development as a Service (SDaaS), which provides scalable resources to build, test, and deploy software. It’s a fast and more reliable way to develop a new product or expand your in-house team.
Feb. 20, 2017 06:15 PM EST Reads: 986
Wooed by the promise of faster innovation, lower TCO, and greater agility, businesses of every shape and size have embraced the cloud at every layer of the IT stack – from apps to file sharing to infrastructure. The typical organization currently uses more than a dozen sanctioned cloud apps and will shift more than half of all workloads to the cloud by 2018. Such cloud investments have delivered measurable benefits. But they’ve also resulted in some unintended side-effects: complexity and risk. ...
Feb. 20, 2017 06:15 PM EST Reads: 801
The explosion of new web/cloud/IoT-based applications and the data they generate are transforming our world right before our eyes. In this rush to adopt these new technologies, organizations are often ignoring fundamental questions concerning who owns the data and failing to ask for permission to conduct invasive surveillance of their customers. Organizations that are not transparent about how their systems gather data telemetry without offering shared data ownership risk product rejection, regu...
Feb. 20, 2017 05:45 PM EST Reads: 502
More and more brands have jumped on the IoT bandwagon. We have an excess of wearables – activity trackers, smartwatches, smart glasses and sneakers, and more that track seemingly endless datapoints. However, most consumers have no idea what “IoT” means. Creating more wearables that track data shouldn't be the aim of brands; delivering meaningful, tangible relevance to their users should be. We're in a period in which the IoT pendulum is still swinging. Initially, it swung toward "smart for smart...
Feb. 20, 2017 05:30 PM EST Reads: 3,898
When you focus on a journey from up-close, you look at your own technical and cultural history and how you changed it for the benefit of the customer. This was our starting point: too many integration issues, 13 SWP days and very long cycles. It was evident that in this fast-paced industry we could no longer afford this reality. We needed something that would take us beyond reducing the development lifecycles, CI and Agile methodologies. We made a fundamental difference, even changed our culture...
Feb. 20, 2017 05:30 PM EST Reads: 2,245
The Internet of Things can drive efficiency for airlines and airports. In their session at @ThingsExpo, Shyam Varan Nath, Principal Architect with GE, and Sudip Majumder, senior director of development at Oracle, discussed the technical details of the connected airline baggage and related social media solutions. These IoT applications will enhance travelers' journey experience and drive efficiency for the airlines and the airports.
Feb. 20, 2017 05:15 PM EST Reads: 961
Feb. 20, 2017 02:45 PM EST Reads: 485