FATCA: Key Impacts and Achieving Compliance

FATCA: Key Impacts and Achieving Compliance

The US Foreign Account Tax Compliance Act (FATCA) is a key piece of US federal legislation intended to improve tax compliance involving foreign financial assets and offshore accounts. FATCA requires Foreign Financial Institutions (FFIs) to identify any US account or policy holders and disclose their balances, receipts, and withdrawals to the US Internal Revenue Service (IRS) or the local tax authority.

Non-participating FFIs and non-compliant account holders may be subject to a 30 percent withholding tax on certain US source income. It should be noted that, in case of non-participating FFI the 30% withholding tax on certain US source income is extended to ALL account holders within the non-participating institution.

The following issues are highlighted in this whitepaper:

  • Is FATCA compliance compulsory?
  • What is the legislative basis for FATCA?
  • What is the impact for participating and non-participating FFIs?
  • What are the key challenges involved in implementing FATCA?



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