Registering of US persons under the Foreign Account Tax Compliance Act (“FATCA”)
The Foreign Account Tax Compliance Act (“FATCA”) is a US legislation aimed at preventing tax evasion by US citizens and residents through overseas assets. FATCA was signed into law on 18 March 2010 by the US Government and came into effect on 1 July 2014.
FATCA is extraterritorial by design and requires “US Persons” to report their financial assets held overseas and requires financial institutions across the world to identify their US accounts through enhanced due diligence review and to report them annually to the IRS or in the case of Inter-Governmental Agreements (IGAs), to appropriate local government authority. The law further requires financial institutions to report more extensively on business they conduct with US persons and introduces a new reporting and withholding regime for Foreign Financial Institutions (FFIs).
Under the provisions of the Act, the following criteria may classify you as a “US Person”
A citizen of USA (including an individual born in the U.S. but resident in another country, who has not renounced US citizenship)
A lawful resident of the US (including a US green card holder)
A person residing in the US
A person who spends a certain number of days in the US each year
US corporations, estates and trusts
Any entity that has a linkage or ownership to US or to US territories
Non-US entities that have at least one US person as a “substantial beneficial owner”
If you are falling within the above criteria, kindly make arrangements to register yourself with you respective Bank y 1 July 2014 in order to be in compliance with FATCA laws.
Please be informed that in order to fulfill the Bank’s FATCA obligations, your Bank may ask you to provide necessary information to establish whether you are a “US Person” and you will be obliged to submit such information and in the event you are classified as a US person you will be required to submit express consent in writing to the Banks enabling the Banks to share your banking details with the IRS.
Further, prospective/new customers applying to commence a new relationship with a bank will also be requested to give a declaration providing express consent to the bank to divulge any information and remit any taxes payable to IRS if required, under the provisions of FATCA.
Kindly note that failure or refusal to do so may result in the Bank declining to offer any services required and in the case of existing accounts, even to close such accounts held by “US persons”.We would further advise that in the event a customer becomes a “US person” after 1 July 2014, the respective Bank must be advised of such change and follow the process of registration.
If you require any further information please contact your respective Bank Branch Managers.