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German Bankers Seek Relief for QIs Affected by Pandemic

MAR. 24, 2020

German Bankers Seek Relief for QIs Affected by Pandemic

DATED MAR. 24, 2020
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24 March 2020

Mr Lafayette G. “Chip” Harter
Deputy Assistant Secretary
(International Tax Affairs)
U.S. Department of the Treasury
1500 Pennsylvania Avenue, NW
Washington, DC 20220

Relief for Qualified Intermediaries Affected by Ongoing Coronavirus Disease Pandemic

Dear Mr Harter,

The German Banking Industry Committee1 represents more than 1,500 German banks, the vast majority of which acts as qualified intermediaries (Qis). Due to the coronavirus emergency, banks and other companies in Germany and all over the world are in serious difficulty meeting all tax deadlines in this period. For this reason some European finance ministries are providing for the suspension of the deadlines for all tax compliance. However, a ministerial decree from a European government will not suspend the upcoming deadlines deriving from the contractual obligations that European banks have towards the IRS arising from bilateral qualified intermediary agreements.

In particular, we refer to:

  • Form 1042-S, which expires on March 15 or, for those who have requested the automatic extension — which many intermediaries generally do — on April 15,

  • Form 1042, which expires on April 15 or, for those who have requested the automatic extension — which many intermediaries generally do — on September 15,

  • Form 1099, whose deadline term was February 28 or, for those who requested an extension, on April 1 for paper filing and late April for electronic filing,

  • periodic reviews in accordance with section 10.04 of the QIA, both in the event of terminating business activities and terminating the agreement in 2018 (final termination; deadline 29 March 2020), and also for the ordinary periodic review for the period 2017-2018 (deadline 1 July).

It is our understanding that the recently announced extension of the filing deadline to July 15, 2020 for taxpayers is not applicable for qualified intermediaries. In view of the above and considering the huge operational challenges in connection with the current crisis, we respectfully request the US tax authorities to provide relief for the coronavirus pandemic by loosening rules for the tax deadlines mentioned above.

Yours sincerely,

on behalf of the German Banking Industry Committee,
Association of German Banks
Berlin, Germany

Joachim Dahm
Managing Director
Head of Fiscal Affairs

Mario Labes
Associate Director
Head of Issues, Projects and Planning

FOOTNOTES

1 The German Banking Industry Committee (GBIC) is the joint committee operated by the central associations representing the interests of the German banking industry. These associations are the Bundesverband der Deutschen Volksbanken und Raiffeisenbanken (BVR), for the cooperative banks, the Association of German Banks (Bundesverband deutscher Banken, BdB), for the private commercial banks, the Bundesverband Öffentlicher Banken Deutschlands (VÖB), for the public banks, the Deutscher Sparkassen- und Giroverband (DSGV), for the savings banks finance group, and the Verband deutscher Pfandbriefbanken (vdp), for the Pfandbrief banks. The member associations of GBIC engage in a collective opinion-forming and decision-making process on legal, political and practical issues relating to banking. These include, in particular, questions concerning prudential regulation, securities legislation and tax law.

END FOOTNOTES

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