US: FATCA—tax credits and excluded obligations
Produced in partnership with John Narducci (Partner) and Stephen C Lessard (Associate) of Orrick, Herrington & Sutcliffe LLP
US: FATCA—tax credits and excluded obligations

The following Tax guidance note Produced in partnership with John Narducci (Partner) and Stephen C Lessard (Associate) of Orrick, Herrington & Sutcliffe LLP provides comprehensive and up to date legal information covering:

  • US: FATCA—tax credits and excluded obligations
  • Are refunds or tax credits available for taxes withheld under FATCA?
  • What obligations are excluded (grandfathered) from FATCA?
  • What are pre-existing obligations?

The Foreign Account Tax Compliance Act (FATCA) has three core elements:

  1. enhanced due diligence

  2. broader information reporting, and

  3. a potential withholding tax on US source payments

This Practice Note considers some of the issues that commonly arise in relation to the implementation of, and compliance obligations arising from, FATCA, including:

  1. whether refunds or tax credits are available for taxes withheld under FATCA

  2. what obligations are excluded (grandfathered) from FATCA, and

  3. what pre-existing obligations are in respect of FATCA

For an analysis of the broad definition of what constitutes a foreign financial institution (FFI) for the purposes of FATCA, and the obligations that arise as a result of falling within its scope, see Practice Note: US: FATCA—foreign financial institutions (FFIs). For an examination of what a non-financial foreign entity (NFFE) is (and what isn't) and the various different types of agreements that can help ease the burdens imposed by FATCA, see Practice Note: US: FATCA—non-financial foreign entities (NFFEs) and FATCA agreements.

For a detailed introduction to FATCA generally, see Practice Note: US: Foreign Account Tax Compliance Act (FATCA)—what is FATCA?

Are refunds or tax credits available for taxes withheld under FATCA?

A beneficial owner generally will be able to obtain a refund or credit of taxes withheld pursuant to FATCA if the beneficial owner or payee files a US federal income tax return and