Foreign Account Tax Compliance Act (FATCA)
FATCA was enacted in 2010 by Congress to target non-compliance by U.S. taxpayers using foreign accounts. FATCA requires foreign financial institutions (FFIs) to report to the IRS information about financial accounts held by U.S. taxpayers, or by foreign entities in which U.S. taxpayers hold a substantial ownership interest. The financial institutions in a few countries still have to apply the FATCA and its hugely complex regulations, because the jurisdictions in which they are established have not signed
Inter-Government Agreements (IGAs).
To this date 112 countries have signed or are deemed to have IGAs with the U.S. Treasury for exchange of financial account information. There are 2 models of IGAs – The first is used by most countries and requires the financial institutions in their jurisdiction to report the US account information to their national authority, which in turn would exchange it with the U.S. Treasury. There are reciprocal and non-reciprocal Model 1 agreements. The non-reciprocal agreements provide for information going from foreign jurisdictions to the U.S. Treasury. A few countries such as Austria, Hong Kong and Switzerland signed a Model 2 IGA, which is non-reciprocal, but the financial institutions are required to submit their FATCA reports directly to the U.S. Treasury. Both Model 1 and 2 financial institutions have the right to apply the FATCA regulations, however, most countries have implemented enabling legislation and have drafted FATCA implementation guidelines that depart in many instances from the FATCA regulations.
Please visit our Resources page for links to more information on FATCA.
USCANTAX will work with your organization’s Management to deliver FATCA solution:
- Evaluate the existing legal entity structure, determine FATCA status and registration strategy. Prepare FATCA registration application.
- Assess & re-negotiate 3rd party agreements, review AML & KYC procedures, strategy how to deal with non-participating FFIs.
- Review IT architecture and lay a road map for the projects ahead
- Draft or update on-boarding procedures and systems. Build or install third party system beneficial owner (W-8 & W-9) classification, validation and electronic submission
- Automated management of client data documentation. Build or install third party system FATCA integration module upon existing or implement a new CRM system
- Perform pre-existing or new account due diligence analysis for individual and entity accounts
- Build or install third party system for tax withholding and annual reporting solution based on existing or implement new asset management system
- Build or install third party solution for automated preparation and electronic submission of Forms 1042 & 1099 series
- Build or install third party automated internal audit reporting system to control FATCA compliance in real time
- Draft Standardized training manuals and perform training sessions to Management and designated Staff to comply with FATCA requirements
USCANTAX can provide your organization with a full set of FATCA services in addition to the implementation of Siron® FATCA/CRS suite of solutions with by our partner FICO GERMANY (fka TONBELLER), AG.