What is the GIIN number for FATCA?
Think about all of the number series that are in some way connected to your identity or the identity of something you value. Most often, these are identification numbers used to register your identity or your item into some larger system. So, for example, your car has a license plate number issued by the state and a VPN number issued by the manufacturer, and, assuming you drive it legally, your actual driver's license has yet another number, all pointing back to you. When you register your phone for its warranty, you use a product number; when you register your dog for his vaccinations, you get a tag number.
So, today we are going to throw another number at you. The FATCA GIIN number. If you register your financial institution with the Internal Revenue Service (IRS) for the purposes of FATCA compliance, you will receive a GIIN number. But what is a GIIN number? How is it used, and what are its component parts? We're glad you asked...
Defining GIIN Number
A GIIN is a Global Intermediary Identification Number, consisting of 19 characters. (Now that you know that the "N" stands for "number," we will stop calling it a GIIN number and just call it GIIN). GIINs are assigned by the FATCA registration system to financial institutions and direct-reporting non-financial entities. The complete list of the variety of reporting entities includes:
- Foreign financial institutions (FFIs).
- Financial institution (FI) branches.
- Direct reporting non-financial foreign entities (NFFEs).
- Sponsoring entities, sponsored entities and sponsored subsidiary branches.
These registered entities can use their official GIIN to identify themselves to withholding agents and tax administrators for FATCA reporting purposes.
The Component Parts
Now let's take a quick look at the pieces of your GIIN and what each number series actually represents. As we mentioned before, the GIIN is 19 characters long if you count the three decimal points. Those non-decimal characters each signify a different thing, depending on where they fall in the overall number sequence. So, a sample GIIN might look something like this:
123456.12345.12.12.123
The first six numbers will be your business entity's FATCA ID. This is a randomly generated alphanumeric series consisting of all upper-case characters. It is issued by the FATCA system when a FATCA account is created. This series will never contain the letter "O". Anything that looks like it might be an 'O' should be read as a zero (0). The FATCA ID is used with an access code to log in to the system and to identify the account for purposes of registration.
For FI branches, this number will be the FATCA ID of its associated FI.
For sponsored or sponsored subsidiary branches, this number will be their sponsoring entity's FATCA ID.
The next five digits represent your financial institution type. These, too, will be alphanumeric and always upper-case. As before, there should be no "O"s.
If your entity is a lead FI or a sponsoring entity, this number will always be 00000.
For single FIs, the number will be 99999.
For member FIs and sponsored entities, the financial type number consists of the last five numbers of their FATCA ID. For sponsored subsidiary branches, this series will be the same as their associated entity.
The third set of digits is your entity's GIIN status code. These codes consist of abbreviations meant to represent the status of your entity within the FATCA system. These abbreviations are as follows:
- Lead financial institutions are represented by LE;
- Sponsoring entities become SP;
- Single FIs are SL;
- Member FIs are ME; and
- Branch FIs are represented as BR.
The final set of digits is a numeric code, which represents the country code for your financial institution or branch.
Why Are GIINs So Important?
GIINs are so important because they serve as a kind of fingerprint for each individual entity within the FATCA registry, allowing users to differentiate between entities quickly and easily. As such, they are used not just by the Internal Revenue Service (IRS) for registration and reporting purposes, but by other FFIs and U.S. withholding agents.
In order to avoid the withholding requirements on foreign accountholders, investors, shareholders or partners, your company needs to gather, review and maintain GIIN documentation. What's more, the IRS requires companies who have entered into FATCA agreements to reconcile all GIINs with their databases on a regular basis. In addition, any previously confirmed GIINs must be reconfirmed on a regular basis.
It is important to note that, in some instances, countries have opted to enter into an intergovernmental agreement (IGA) with the U.S. in order to satisfy their FATCA obligations. Countries may choose this route as a way of preventing their national companies from having to deal directly with the IRS. In such agreements, FFIs will report to their individual government agencies, which then pass on those reports to FATCA. The GIINs for companies whose country participates in an IGA may have a slightly different format from those listed traditionally.
Entity Management Software Helps You Maintain FATCA Compliance
Like so many other aspects of FATCA, the management of GIINs manifests itself not only as a tax reporting issue, but as part of the customer identification and verification process. If you are a corporation with multiple entities across the globe or a FI dealing with a wide array of U.S. taxpayer accountholders, then this prospect may be particularly fraught. As with other exercises of this nature, the classification and verification of each entity within an enterprise, or each entity with which an FI does business, can be a costly and time-consuming task.
Entity management software can help ease that burden by creating a single source of corporate data, including GIINs, which can be indexed and updated through a secure, easy-to-operate dashboard. In addition, wherever applicable, entity management software can create automated processes that can reconfirm the GIINs of affiliate entities and financial institutions.
This automation can save you time and money, and may keep you from having to pay the withholding penalties associated with FATCA.
If you have further questions about how FATCA uses GIINs to identify foreign investors and institutions, contact a Diligent representative. At Diligent, we strive to offer you the answers you need to keep your business safe, compliant and successful.
