FATCA Withholding Begins July 1, 2014

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When does the new FATCA withholding begin? Effective July 1, 2014, withholdable payments of U.S.-source FDAP income will be subject to 30% FATCA (Foreign Account Tax Compliance Act) withholding. The new requirement applies to payments made to Foreign Financial Institutions (“FFIs”) and Non-Financial Foreign Entities (“NFFEs”). The types of income that are subject to the withholding include interest, dividends, rents, royalties, annuities and compensation. Withholding begins on January 1, 2017 for withholdable payments of gross proceeds from the disposition of property that produces FDAP income. To avoid the 30% FATCA withholding, FFIs and NFFEs must …read more

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