FATCA: A Survival Guide for Nonfinancials

The original target of the Foreign Account Tax Compliance Act (FATCA) was foreign banks with U.S. account holders; however, the legislation's broad drafting also captures payments to nonfinancial foreign entities (NFFEs).

While the statute and proposed regulations released in February 2012 provide some relief in situations presenting a low risk of tax evasion, NFFEs are well advised to prepare for FATCA.

This article focuses on how nonfinancial companies can effectively implement the regulations in whatever form they are finalized, and looks at:

• Making withholdable payments
• Getting and relying on Forms W-8
• Addressing W-8 issues
• Preparing your company for FATCA

This article was published in the June 5, 2012, issue of Daily Tax Report and appears here with the permission of The Bureau of National Affairs, Inc.