FATCA & CRS Alert 2022-02

Automatic Exchange of Information - Updated FATCA instructions and CRS FAQs

Automatic Exchange of Information - Updated FATCA instructions and CRS FAQs

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Automatic Exchange of Information

Updated FATCA instructions and CRS FAQs

1. FATCA

Following our previous newsletter, we would like to inform you that those new rules related to the TIN field for FATCA reporting purposes finally entered into force.

Especially, it should be now possible to populate the TIN field of a passive non-financial entity with a foreign TIN (i.e. a non-U.S. TIN) or, in the absence of foreign TIN, with the code "NA".

2. CRS

On 4th April 2022, the ACD released an updated version of the Common Reporting Standard (“CRS”) Frequently Asked Questions (“FAQs”).

In the updated FAQs, the ACD added questions 2.3. and 2.4. in the section on Financial Institutions, listing the types of Luxembourg entities falling within the scope of the definition of Investment Entity.

The following entities (non-exhaustive list) are in principle to be considered as Investment Entities:

  • any undertaking for collective investment subject to Part I or II of the amended law of 17 December 17, 2010 concerning undertakings for collective investment;
  • any specialized investment fund subject to the amended law of February 13, 2007 relating to specialized investment funds;
  • any risk capital investment company governed by the amended law of June 15, 2004 relating to the Investment company in risk capital (SICAR);
  • any securitization undertaking subject to the authorization and supervision of the CSSF in accordance with the law of March 22, 2004 relating to securitization;
  • any reserved alternative investment fund governed by the amended law of 23 July 2016 relating to reserved alternative investment funds;
  • any alternative investment fund whose management falls within the scope of the law amended law of July 12, 2013 relating to alternative investment fund managers;
  • any pension fund falling within the scope of the amended law of July 13, 2005 on institutions for occupational retirement provision in the form of a sepcav and assep;
  • any pension fund governed by the amended Grand-Ducal regulation of 31 August 2000 implementing article 26, paragraph 3, of the amended law of December 6, 1991 on the insurance sector industry relating to pension funds subject to prudential supervision by the Commissariat aux assurances;
  • any management company subject to part IV of the amended law of 17 December 2010 concerning undertakings for collective investment;
  • any alternative investment fund managers governed by the amended law of July 12, 2013 on alternative investment fund managers; and
  • any investment firm governed by the amended law of April 5, 1993 on the financial sector that carries out any of the following activities: (i) execution of orders on behalf of (ii) portfolio management.

In addition, a non-regulated entity cannot opt for the status of exempt collective investment vehicle (“CIV”) as this status can only be chosen by entities themselves subject to the supervision of the CSSF, and only if the other specific requirements for this exempt status are fulfilled.

As a reminder, an Investment Entity which is considered a Reporting Financial Institution will be subject to the following CRS requirements:

  • Identify and document their existing investors/creditors holding equity and debt interests;
  • Update the process of onboarding new investors/creditors in order to properly document and classify the investors for CRS purposes; and
  • Report any of the investors/creditors that qualify as CRS Reportable Person on a yearly basis.

If such a Financial Institution does not file a CRS report, it should have a written justification of its non-reporting status. We understand that such a written justification could be for instance a proper CRS classification memo. We can assist you with this classification analysis.

In any case, do not hesitate to reach out to us should you need assistance with your FATCA and CRS reporting obligations. We have developed an innovative reporting solution that enables our clients to process their CRS and FATCA reports quickly and efficiently.