International Data Exchange Service (IDES) – User Guide

International Data Exchange Service

The IRS has made the user guide for the international data exchange service (IDES) available. This guide is intended to serve as a tool for all parties involved in the FATCA data exchange. FATCA was created to improve transparency and address tax non-compliance by U.S. taxpayers. FATCA requires certain foreign financial institutions (FFIs) to report certain information about its U.S. accounts (including U.S. owned foreign entities), accounts held by owner-documented FFIs (ODFFI), and certain aggregate information concerning account holders that are recalcitrant account holders and, for a transitional period, accounts held by nonparticipating FFIs. Generally, FFIs will commit to these reporting requirements by registering with the IRS and signing an agreement with the IRS; however, the FFI agreement does not apply to FFIs under a Model 1 IGA. In most cases, FFIs that do not register with the IRS will be subject to 30% withholding on certain U.S. source payments (unless an exception applies).

Purpose of the User Guide

This guide is intended to serve as a tool for FIs, direct reporting NFFEs, sponsoring entities, non-GIIN filers, and Host Country Tax Authorities (HCTAs) who transmit data through the International Data Exchange Service (IDES). The document assumes that the reader is familiar with the FATCA regulations and is experienced with extensible markup language (XML) and schema technology. For the purpose of this document, direct reporting NFFEs, sponsoring entities, non-GIIN filers and trustees of trustee-documented trusts should follow the instructions set forth for FIs. Additionally, the term “U.S. withholding agent” includes a territory FI treated as a U.S. person.

About IDES

IDES is a secure managed file transfer service that is available to FIs and HCTAs to facilitate FATCA reporting. This reporting is provided for under U.S. Treasury Regulations, the FFI agreement, Tax Information Exchange Agreements (TIEAs), Intergovernmental Agreements (IGAs), and other guidance issued by the Treasury Department and the IRS. The data collected through IDES will be incorporated into IRS compliance operations.

IDES is accessible to enrolled users over the Internet via Hypertext Transfer Protocol Secure (HTTPS) or Secure File Transfer Protocol (SFTP). IDES provides for an end-to-end controlled file transfer with enhanced monitoring and security features. The system only accepts encrypted electronic submissions, and will allow for the transmission of FATCA reporting in the approved FATCA XML Schema v1.1 (FATCA XML). For more information on FATCA regulations, Form 8966 and instructions, FATCA XML, and other related topics, visit the FATCA Home Page.

The main function of IDES is to provide authorized users with secure exchange services for FATCA data transmissions, with the additional protection of a Public Key Infrastructure (PKI).

Source: IRS
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Posted on 18 February 2016 in Multi Data Exchange Solution

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