FATCA - New requirements for financial institutions in Germany


On May 31, 2013 Germany and the US signed a Model 1 IGA which entered into force in Germany on December 11, 2013 (Germany-USA IGA). Financial institutions in Model 1 IGA countries must register with the IRS and apply for a Global Intermediary Identification Number (GIIN).However, the obligation to provide the GIIN to withholding agents does not come into effect until 2015. It is nevertheless advisable that an application for registration be made at the latest by October 2014 in order to ensure a timely inclusion on the list of registered financial institutions which is published by the IRS. A number of German financial institutions are already on the list.

The FATCA-USA Implementation Regulation ("FATCA-USA Umsetzungsverordnung" (FATCA-USA-UmsV)) has been adopted in Germany to transpose the obligations under the Germany-USA IGA and it came into force on July 29, 2014. Pursuant to the wording of the Regulation, reporting German financial institutions must register with the IRS if they hold U.S. reportable accounts or accounts of non-participating financial institutions (as defined in the IGA). The corresponding inference is that German financial institutions which do not hold such accounts would not be required to register.

A planned FATCA guidance letter from the German Ministry of Finance has not yet been issued. It is hoped that this letter, when published, will provide clarification on the registration duty.