The Foreign Account Tax Compliance Act (FATCA) was enacted by the United States Congress in March 2010 to improve compliance with US tax laws. FATCA imposes certain due diligence and reporting obligations on foreign (non-US) financial institutions, including Philippines institutions. These institutions will be required to report to the US Internal Revenue Service (IRS) information on US citizens with financial accounts.
|ADVISORY 4||The Department of Finance (DOF), in it's letter dated 13 January 2017, to the Office of the International Tax Councel of the U.S. Department of Treasury stated to wit: "We [are] informed that on 01 December 2016, President Duterte ratified the [FATCA] agreement and it was transmitted to the Senate on 06 December 2016 for concurrence."|
June 28, 2016
|FATCA FAQs now available.|
May 10, 2016
All reporting Philippine Financial institutions (PFIs) subject to FATCA regulations are hereby advised that:
The CAA sets out administrative details of the IGA and it will be effective once the IGA has entered into force.
September 4, 2015
The Inter-Governmental Agreement (IGA) on the Foreign Account Tax Compliance Act (FATCA) between the Philippines and the United States of America was on July 13, 2015 and may be viewed in the link below:
Pending entry into force of the IGA, the concerned Philippine financial institutions (PFIs) are hereby advised that reporting will not take place on September 30, 2015. However, PFIs must take the necessary steps to prepare for full implementation of the terms of the IGA and the concomitant submission of information on reportable accounts beginning the second quarter of 2016.
PFIs are also reminded that the first batch of reports to be submitted shall include information relating to their 2014 and 2015 reportable accounts as detailed in the IGA.
In coordination with other regulatory agencies of the Philippine Government, the Bureau of Internal Revenue (BIR) shall notify the public of further updates and promulgate the necessary rules and guidelines to facilitate compliance of PFIs with FATCA.
Any inquiries on the matter may be addressed to the BIR’s International Tax Affairs Division at email@example.com and contact number 927-0022.
Reporting Philippines Financial Institutions should register at the FATCA Registration Portal as a “Registered Deemed-Compliant Financial Institution (Including a Reporting Financial Institution under a Model 1 IGA)” and obtain a Global Intermediary Identification Number (GIIN) from the US IRS’ Foreign Financial Institution (FFI)
More information on FATCA registration can be found on the IRS website (https://www.irs.gov/Businesses/Corporations/Foreign-Account-Tax-Compliance-Act-FATCA)
The table below provides an overview of the steps that a Reporting PFI should take to prepare for FATCA data reporting through IDES:
1. Preparing the FATCA reporting data file in XML format
• Generate the FATCA reporting data file in accordance with the FATCA XML Schema. (Please see details in section below on FATCA Data Format).
• Validate the FATCA reporting data file against the FATCA XML Schema.
• If necessary, seek the services of an IT professional or vendor to assist in capturing and preparing the data in accordance with the FATCA XML Schema.
2. Enrolling with IDES
• IDES is open for enrolment. To enroll, the Reporting PFI will need:
A. Its GIIN:
B. A valid email address; and
C. A digital certificate purchased from a US IRS-approved Certificate Authority. Please allow sufficient time (minimally two weeks before enrolment) to acquire the digital certificate as the Certificate Authority will need time to verify the Reporting PFI’s credentials before issuing the digital certificate.
• Please refer to Section 6 to 8 of the IDES User Guide for enrolment instruction and the functions available to users of the IDES (i.e. the Reporting PFI’s administrator and end users).
• The IDES Enrollment site can be accessed here.
3. Preparing the FATCA reporting packet for transmission
• In preparing the FATCA reporting packet, the Reporting PFI is required to adopt the following process and file naming convention (which is case-sensitive) strictly.
|Step||Process||File Name Convention|
|1.||Digitally sign the validated FATCA reporting data file||
|2.||Compress the digitally signed FATCA reporting data file with Compatible compression utility||
Encrypt the compressed FATCA reporting data file with an AES-256 key
Encrypt the AES-256 key with the public key of each recipient:
|5.||Create sender metadata||
Create the FATCA reporting docket by following files with a compatible compression utility:
• Encrypted XML Payload (Step 3)
• Please refer to Section 9 of the IDES User Guide for data preparation instructions.
• Reporting PFIs are advised to seek the services of an IT professional or vendor to assist them with preparation of the FATCA reporting packet if required.
4. Transmitting the FATCA reporting packet to BIR, via the IDES
• The Reporting PFI will transmit the FATCA reporting to BIR via the IDES Gateway. The transmitted file will only be released to the US IRS upon BIR’s approval.
• The Reporting PFI will be able to upload and transmit a file using web UI or SFTP. Please refer to Section 11 of the IDES User Guide for detailed instruction on file transmission
• The Reporting PFI will receive transmission-related alerts (subject to the user’s Alert Preferences settings) from the IDES after it has submitted the FATCA reporting packet.
• Reporting PFIs are regarded to have submitted their FATCA return to BIR for the reporting year when they receive an email alert (with Alert Code: RC023 “Successful upload and approval by the HCTA (Model Option 2”) from IDES informing them that their FATCA reporting packet has been approval by BIR. No further action is required until the US IRS informs BIR that the submitted FATCA reporting data file/packet contains error(s). Affected Reporting PFIs will be given additional time to correct that error(s) and submit a revised FATCA reporting packet through the IDES.
Reporting PFIs will need to have processes in place to collate and prepare the required data in accordance will the prevailing FATCA XML Schema set out in the table below. Data Submitted to BIR in any other format will not be accepted.
|Version||Status||XML Schema||User Guide|
FATCA XML Schema
FATCA XML User Guide
FAQs have been prepared to assist Reporting PFIs fulfilling their FATCA obligations. The FAQs will be updated on a regular basis as and when there are new developments.
FAQs – General (Under Construction)
For further inquiries, you may send an email to firstname.lastname@example.org.