The US Foreign Account Tax Compliance Act (FATCA) came into force on 1 January 2013 and was formally implemented with effect from 1 July 2014. To facilitate an orderly transition, the United States IRS will refrain from rigorously enforcing many of the FATCA requirements during 2014 & 2015, as long as foreign financial institutions (FFIs) are making a good-faith effort to achieve compliance. Effectively this gives FFIs a two year period of grace shielding them partially from the various penalties.
This partial relaxation gives both YOU and YOUR INSTITUTION a short window to come up-to-speed with the complexities of the FATCA requirements and their implementation. In short – you don’t really have that much time to become compliant.
Under U.S. tax law, “U.S. persons” (which includes U.S. citizens and U.S. permanent residents residing outside of the United States) are generally required to report and pay taxes on income from all sources irrespective of where these are located.
Among the Foreign Account Tax Compliance Act (FATCA) provisions is the requirement that foreign financial institutions (FFI), such as banks, must enter into an agreement with the United States’ IRS to identify their U.S. account holders and to disclose the account holders' names, and other account and transactional information.
In essence the term ‘Foreign Financial Institutions’ (FFI) applies to all non-US Financial Institutions worldwide.
Failure to comply with FATCA will be costly and may subject foreign financial institutions to a 30% withholding tax on U.S.-sourced payments, which includes dividends, interest and gross proceeds from the sale of assets which may generate U.S. dividends or Interest.
This makes it obligatory for all banks, irrespective of their domicile and registration to comply with the United State’s Foreign Account Tax Compliance Act. Failure to do this will seriously affect their business and their ability to interact with US based account holders, banks and other corporations and to receive and process payments in US dollars.
Eureka Financial is running a one-day workshop in central London on Wednesday 10th September entitled FATCA COMPLIANCE. This workshop is all about what you have to do to effectively comply with the FATCA requirements.
By attending this workshop you will learn;
- How FATCA will affect your business and operations and your organisation.
- How FATCA will affect your role in your institution.
- The contents of the various Inter-Governmental Agreements (IGAs) and their interpretation and application.
- What the requirements are for developing/ implementing an effective FATCA action plan, including establishment of policies and procedures.
- The FATCA operational and technical requirements.
- The FATCA due diligence requirements and the identification of US accounts.
- How to report U.S. accounts (and to whom).