In an effort to inform the market on the implications of the Foreign Tax Compliance Act (FATCA), Deloitte Romania organized an event in partnership with the Romanian Banking Institute (RBI).
FATCA refers to the exchange of information between the US and other countries as a tool meant to prevent tax avoidance. Beginning with July 1, 2014 when FATCA becomes effective, all US companies and individuals have to declare the accounts they have outside the US while non-US financial institutions have to report to the US Tax Authority (Internal Revenue Service - IRS), or local tax authorities, information regarding their US clients. Financial institutions have to register by April 25 in order to avoid potential withholding tax which could apply to certain US sourced payments.
“The future legislative amendments in Romania generally follow the international trends of putting in place various instruments for information exchange between countries as a way to minimize tax avoidance,” said Dan Badin, Partner Deloitte Romania. FATCA is just the tip of the iceberg in the global context of international exchange of information and we expect such trend to become global, as the Organisation for Economic Co-operation and Development (OECD) has recently announced its intention to promote similar model conventions for information exchange between any two countries.”
Most countries in Central Europe are involved in various stages of negotiating an intergovernmental agreement for automatic exchange of information at government level: Slovakia, Poland and the Czech Republic are expected to sign the agreement soon and Hungary already has an agreement in place. An agreement between Romania and the US is still pending and there is some uncertainty as to when it will be signed.
Those financial institutions that will be affected should be prepared to handle this situation and it is recommended that they proceed with implementing the necessary changes in their systems and processes to be able to comply with FATCA requirements by 1 July 2014, despite the uncertainty surrounding the agreement in Romania.
On March 11, Deloitte along with the RBI organized an event on “FATCA is getting closer… Are we ready?” Over 140 officials from banks and financial institutions participated in the event, underscoring an increased interest in the changing legal and tax framework.
Besides Deloitte Romania representatives, Laszlo Winkler, Tax Director, and Eniko Takacs, Tax Manager of Deloitte Hungary, spoke about the latest changes regarding FATCA in Europe and the current stage of its implementation in Hungary as well as the impact on the targeted entities.
The partnership between Deloitte and RBI is in line with RBI’s strategy to deliver the latest updates in the financial field to the professionals from the respective industry. Through its founders, the National Bank of Romania (NBR) and the Romanian Banks Association (RBA), RBI is the vector in designing and implementing the most technical training programs for the financial services industry.
Thus, the second half of the FATCA conference was organized as a round table discussion, with experts from RBA’s technical commissions, which are primarily involved in implementing FATCA: Taxation, Accounting and Compliance.
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Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee, and its network of member firms, each of which is a legally separate and independent entity. Please see www.deloitte.com/ro/about for a detailed description of the legal structure of Deloitte Touche Tohmatsu Limited and its member firms.
Deloitte provides audit, tax, consulting, and financial advisory services to public and private clients spanning multiple industries. With a globally connected network of member firms in more than 150 countries, Deloitte brings world-class capabilities and deep local expertise to help clients succeed wherever they operate. Deloitte's approximately 200,000 professionals are committed to becoming the standard of excellence.
© 2014 Deloitte Romania
Preparing for FATCA-
a Tool Meant to Prevent Tax Avoidance
Bucharest, March 19, 2014. In an effort to inform the market on the implications of the Foreign Tax Compliance Act (FATCA), Deloitte Romania organized an event in partnership with the Romanian Banking Institute (RBI).
FATCA refers to the exchange of information between the US and other countries as a tool meant to prevent tax avoidance. Beginning with July 1, 2014 when FATCA becomes effective, all US companies and individuals have to declare the accounts they have outside the US while non-US financial institutions have to report to the US Tax Authority (Internal Revenue Service - IRS), or local tax authorities, information regarding their US clients. Financial institutions have to register by April 25 in order to avoid potential withholding tax which could apply to certain US sourced payments.
“The future legislative amendments in Romania generally follow the international trends of putting in place various instruments for information exchange between countries as a way to minimize tax avoidance,” said Dan Badin, Partner Deloitte Romania. FATCA is just the tip of the iceberg in the global context of international exchange of information and we expect such trend to become global, as the Organisation for Economic Co-operation and Development (OECD) has recently announced its intention to promote similar model conventions for information exchange between any two countries.”
Most countries in Central Europe are involved in various stages of negotiating an intergovernmental agreement for automatic exchange of information at government level: Slovakia, Poland and the Czech Republic are expected to sign the agreement soon and Hungary already has an agreement in place. An agreement between Romania and the US is still pending and there is some uncertainty as to when it will be signed.
Those financial institutions that will be affected should be prepared to handle this situation and it is recommended that they proceed with implementing the necessary changes in their systems and processes to be able to comply with FATCA requirements by 1 July 2014, despite the uncertainty surrounding the agreement in Romania.
On March 11, Deloitte along with the RBI organized an event on “FATCA is getting closer… Are we ready?” Over 140 officials from banks and financial institutions participated in the event, underscoring an increased interest in the changing legal and tax framework.
Besides Deloitte Romania representatives, Laszlo Winkler, Tax Director, and Eniko Takacs, Tax Manager of Deloitte Hungary, spoke about the latest changes regarding FATCA in Europe and the current stage of its implementation in Hungary as well as the impact on the targeted entities.
The partnership between Deloitte and RBI is in line with RBI’s strategy to deliver the latest updates in the financial field to the professionals from the respective industry. Through its founders, the National Bank of Romania (NBR) and the Romanian Banks Association (RBA), RBI is the vector in designing and implementing the most technical training programs for the financial services industry.
Thus, the second half of the FATCA conference was organized as a round table discussion, with experts from RBA’s technical commissions, which are primarily involved in implementing FATCA: Taxation, Accounting and Compliance.
##
Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee, and its network of member firms, each of which is a legally separate and independent entity. Please see www.deloitte.com/ro/about for a detailed description of the legal structure of Deloitte Touche Tohmatsu Limited and its member firms.
Deloitte provides audit, tax, consulting, and financial advisory services to public and private clients spanning multiple industries. With a globally connected network of member firms in more than 150 countries, Deloitte brings world-class capabilities and deep local expertise to help clients succeed wherever they operate. Deloitte's approximately 200,000 professionals are committed to becoming the standard of excellence.
© 2014 Deloitte Romania
