What is FATCA?
The Foreign Account Tax Compliance Act (FATCA), was passed by the United States (US) Congress on 18 March 2010 as part of the HIRE Act. FATCA requires that certain Foreign Financial Institutions and certain other Non-Financial Foreign Entities report on financial accounts and/or foreign assets held by U.S. persons or by foreign entities in which U.S. persons hold a substantial ownership interest or be subject to withholding on with-holdable payments. FATCA is an important development in U.S. efforts to combat tax evasion by U.S. persons holding accounts and other financial assets offshore.
Who is a United States (U.S.) Person?
The term “United States person” means
What is a Foreign Financial Institution (FFI)?
Foreign Financial Institutions (FFIs) are institutions that:
What is a Competent Authority?
As a customer, how will FATCA affect me?
New and existing customers will be required to provide the FFI with information to determine whether they are U.S. persons. All customers will be subject to an electronic perusal of their account information. This perusal seeks to determine which accounts have US indicia. US indicia include whether a customer is a U.S. Person. It also includes the use of a United States address, Post Office Boxes and United States telephone number(s). If these basic levels of indicia are identified, the customer will be required to disclose their legal name, address, and Tax Information Number (TIN). This information, as well as the account number, the account balance and the gross receipts and gross withdrawals or payments from the reportable account will be exchanged between the Competent Authorities annually.
What are the consequences to customers for not disclosing the information required by FATCA?
Account Holders failing to provide sufficient information about the identity of its substantial U.S. owners or U.S. persons who do not disclose the requisite information to an FFI will have their accounts flagged as non-compliant. The FFI will be required to eventually close the account if the information is not received within a specified period of time. Until the closure of the account, a 30% levy will be applied to any payment of interest, rents, royalties, salaries, wages, annuities, licensing fees, income, and profits derived from sources within the U.S.
When is the commencement date for FATCA?
Anguilla is treated as having an Inter-Governmental Agreement in effect as of June 30, 2014
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