Latest update regarding the FATCA project
The US legislation Foreign Account Tax Compliance Act, also known as FATCA, came into effect on January 1, 2013, empowering the US tax authority Internal Revenue Service (IRS) to get access to information regarding US related assets and payments.
Impact on participants at Euroclear Sweden
The participants that primarily will be affected by FATCA are account operators and nominees. During the fall, we have explored the possibilities to practically implement one common market wide solution for the securities accounts in the VPC system. The work has focused on the first phase of the FATCA implementation where new IT functionality must be in place by December 31, 2013.
In order to support FATCA, we will need to develop the VPC system for storing account information, producing files regarding account holder and account data, as well as marking accounts as reportable.
Furthermore, additional functionality to support withholding of tax on US securities could be required. In a second phase, it will also be necessary to develop support systems for FATCA reporting to the Swedish Tax Agency.
Until now we have been cooperating with several account operators and nominees regarding how to implement FATCA. The market is currently awaiting a confirmation from the Swedish Ministry of Finance regarding the outline of the agreement with the US, on which the Swedish law will be based.
In February we will invite account operators and nominees to an information meeting on the foreseen impact that the new legislation will have on securities accounts in the VPC-system.