Before the deadline, the Depósito Central de Valores (DCV) successfully completed its registration with the Internal Revenue Service of the United States (IRS) as a Single Financial Institution (Single FI), a process which allows it to be recognized as a provider of financial services that complies with the FATCA legislation (Foreign Account Tax Compliance Act).

Since DCV apprised itself of the new U.S. law, it has worked hard to comply with the regulations. First of all, an evaluation and diagnosis was carried out to define the impact of this law. The analysis was also focused on the business and operational processes, the method of tax withholding and processes of annual reporting, among others.

FATCA, whose principal purpose is to prevent tax evasion by U.S. taxpayers, among many other subjects and provisions, states that financial institutions around the world, including Chilean institutions, DCV among them, have an obligation to contribute by sending to the U.S. tax authority (IRS) information in relation to financial accounts or products held by U.S. taxpayers in Chile, subject to certain obligations of due care, reporting and penalties or withholding for non-compliance.

By registering with the IRS and obtaining the GIIN (Global Intermediary Identification Number), DCV takes another step in the consolidation of its role as provider of international custody services and is enabled to operate in the U.S. market.

What comes

The law takes effect on July 1st, 2014 and the DCV is already making changes in processes, systems and forms to comply with the requirements set out in the rule.

During the coming weeks we will begin the process of gathering client information which must be sent to the IRS according to the law. This information includes:

1. GIIN, for those depositors who are registered with the IRS.
2. Legal address of the company and place of incorporation.
3. Report whether the company has been classified as a “US Person”.
4. List of direct shareholders, indicating if there is knowledge about any of its controlling shareholders being classified as a “US Person”.
5. Clients of the International Custody Service may be requested to report the opening of instructions, at a Final Beneficiary level, when acting on behalf of third parties.
6. Other information necessary to comply with the rules.

The information provided will be treated as confidential and will only be disclosed to the IRS with the written consent of each Depositor.

In the absence of such consent, DCV is required by FATCA, to inform the IRS at an aggregate level of this situation, under the concept of accounts without consent.

We hope that all participants will assist in this process, which undoubtedly represents a country challenge.

DCV Noticias