FATCA Enters into Force
Tax Alert 16/2015
3 November 2015
The Act on the Performance of the Agreement between the Government of the Republic of Poland and the Government of the United States of America to Improve the International Tax Compliance and to Implement FATCA of 9 October 2015 (hereinafter: “FATCA Act”) was published in the Journal of Laws of the Republic of Poland on 27 October 2015. FATCA Act enters into force as of 1 December 2015.
Article 1 of the FATCA Act defines the principles of compliance with the provisions of the Agreement between the Government of the Republic of Poland and the Government of the United States of America to Improve the International Tax Compliance and to Implement FATCA and accompanying Final Provisions signed on 7 October 2014 in Warsaw within the territory of the Republic of Poland (Journal of Laws of 2015, item 1647).
Application of the FATCA Act
Interestingly, apart from the provisions of the FATCA Act presented in the previous tax alert the Act also assumes the possibility to commission identification of U.S. reportable accounts and financial accounts held by nonparticipating financial instructions to third parties.
Preparing information on U.S. reportable accounts or accounts held by nonparticipating financial institutions to be provided to the Ministry of Finance or an authorized entity may also be outsourced. Outsourcing may become a useful solution for all reporting Polish financial institutions, in particular those which had not carried out FATCA implementation works.
Moreover, Articles 19 to 21 of the FATCA Act define a special identification procedure applicable to individual and corporate accounts opened from 1 July 2014 to the effective date of the Act (hereinafter: “transition accounts”).
Reporting Polish financial institutions will have to block transition accounts if the account holder fails to provide a required statement within a deadline specified in the applicable law.
If the account is blocked neither the account holder nor the financial institution blocking the account will be able to dispose of and use any assets accumulated on the transition account. According to FATCA, external entities may carry out activities related to identification of transition accounts as U.S. reportable accounts upon a request of reporting Polish financial institutions.