FATCA/CRS: entities classification, due diligence and reporting obligations for the alternative sector

The Foreign Account Tax Compliance Act (FATCA) and the Common Reporting Standard (CRS) constitute key tax transparency regulations that came into force in 2014 and 2016, respectively. Both regulations have been transposed into the Luxembourg laws and have been amended by the law of 18 June 2020 known as "the FATCA and CRS governance law".

Since January 2021, all Luxembourg Financial Institutions ("FIs") are required to establish a FATCA/CRS compliance programme encompassing various requirements such as IT infrastructure, written policies and procedures, and oversight in case of delegated functions). A second important pillar of this compliance programme requires FIs to implement proportionate and effective controls to ensure compliace with FATCA and CRS due diligence and reporting obligations.

While presenting all important FATCA and CRS key principles with concrete examples, our expert will also present participants with some best-market practices to get an efficient FATCA/CRS operating model and reduce the challenges faced by FIs.

This training also provides with some insight into recent regulatory updates, (if any), and the controls and inquiries performed by the Luxembourg tax authorities.

This advanced module for the asset management and custody industry will also cover the FATCA/CRS classification of the funds and other vehicles within investment structures.

By the end of this training, the participants will be able to:

• explain the purpose and the mechanism of the FATCA and CRS rules and their general impacts (incl. the FATCA and CRS governance requirements);
• understand the main synergies and differences between FATCA and CRS;
• determine how to review self-certification from individual and corporate investors (including U.S. forms);
• understand the different FATCA and CRS statuses that funds can possess;
• explain the procedures for identifying controlling persons of entities;
• list the main elements to be reported and the associated timeline;
• have a clear action plan for establishing an efficient FATCA and CRS operating model;
• explain the main related risks.

• FATCA/CRS – Introduction
• Main obligations under FATCA and CRS for FIs
• FATCA and CRS governance
• Legal entity classification
• New investors on-boarding process
• Reporting

This training will be coordinated by Pierre Kirsch, Partner at PwC Luxembourg.

Pierre, Tax Partner, is an authorised manager of the PFS Tax Information Reporting department, overseeing all services related to tax transparency and automatic exchange of information.

With over 27 years of experience in the private banking and asset management industries in Luxembourg, Pierre has developed a profound understanding of their internal processes.

He has conducted various tax transparency analyses of the private and corporate client base of several major financial institutions in Luxembourg and abroad.

The primary objectives of these analyses were to assess the level of risk posed by non-tax compliant clients and to formulate appropriate and measurable action plans.