Access to Americans’ Bulk Sensitive Personal Data and Government-Related Data by Countries of Concern
SIFMA provided comments to the U.S. Department of Justice, National Security Division on the proposed rulemaking concerning bulk data transfers…
Mr. Chip Harter
Deputy Assistant Secretary (International Tax
Affairs)
U.S. Department of the Treasury
1500 Pennsylvania Avenue, NW
Washington, DC 20220
Mr. Doug Poms
International Tax Counsel
U.S. Department of the Treasury
1500 Pennsylvania Avenue, NW
Washington, DC 20220
Mr. Daniel Winnick
Attorney-Advisor (Office of Tax Policy)
U.S. Department of the Treasury
1500 Pennsylvania Avenue, NW
Washington, DC 20220
Mr. John Sweeney
Branch Chief, Branch 8
Office of Associate Chief Counsel, International
Internal Revenue Service
1111 Constitution Avenue, NW
Washington, DC 20224
Ms. Marjorie Rollinson
Associate Chief Counsel, International
Internal Revenue Service
1111 Constitution Avenue, NW
Washington, DC 20224
Re: Foreign Account Taxpayer Compliance Act (“FATCA”) Gross Proceeds
Dear Ladies and Gentlemen,
The Securities Industry and Financial Markets Association (“SIFMA”) 1 is pleased to submit the following additional comments on gross proceeds withholding under FATCA. Our members appreciate the practical approach you taken to implementing FATCA, including the implementation deferral with respect to gross proceeds withholding that is currently scheduled to expire on January 1, 2019. Noting the cost and complexity associated with implementation of this rule, we feel it is important to reiterate our members’ strong interest in working with you to develop an approach that is least disruptive to financial markets.
The President’s Executive Order 13777 (“Presidential Executive Order on Enforcing the Regulatory Reform Agenda”) points the way towards a least disruptive approach and we are encouraged that you have prioritized the FATCA gross proceeds regulations as an area for near-term burden reduction in the Second Quarter Update to the 2017-18 Priority Guidance Plan released on February 7, 2018. In partial response to your recent request for comments in Notice 2018-43, we would encourage you to continue to prioritize FATCA burden reduction and to consider ideas such as those listed in Appendix I to this letter that we are happy to discuss in more detail.
As you know, beginning in 2019, a withholding tax of 30 percent is scheduled to apply to gross proceeds from the sale or other disposition of any property of a type that can produce interest or dividends that are U.S.-source fixed or determinable, annual or periodical (“FDAP”) income.2 U.S. withholding agents, participating foreign financial institutions (“PFFI”), and withholding qualified intermediary (“QI”) FFIs will then generally be required to withhold on payments of gross proceeds made to recalcitrant account holders and non-participating FFIs.
1 SIFMA is the voice of the U.S. securities industry. We represent the broker-dealers, banks and asset managers whose nearly 1 million employees provide access to the capital markets, raising over $2.5 trillion for businesses and municipalities in the U.S., serving clients with over $18.5 trillion in assets and managing more than $67 trillion in assets for individual and institutional clients including mutual funds and retirement plans. SIFMA, with offices in New York and Washington, D.C., is the U.S. regional member of the Global Financial Markets Association (GFMA). For more information, visit http://www.sifma.org
2 Treas. Reg. § 1.1473-1(a)(1)(ii)