A ccount H olders Allison Christians FATCA Facts US law in force US Treasury implementing can choose to delay restrict tone down or forge ahead expand ratchet up Aimed at nonUS third parties who hold customers money and financial assets ID: 933051
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Slide1
FATCA Basics for Foreign
A
ccount
H
olders
Allison Christians
Slide2FATCA Facts
US law, in force, US Treasury implementing, can choose to
delay, restrict, tone down; or
forge ahead, expand, ratchet up
Aimed at non-US third parties who hold customers’ money and financial assets
Will punish these third parties with penalties if they do not either
ensure their customers are not ‘US persons’, or
If they are US persons, tell the IRS about their assets and gross income.
Slide3So, we want
to
know:
who
are these third parties
?
how
will
they ensure
their customers are not US persons?; and
what will they have to do if they think their customers are US persons?; and
what do I have to do as a customer?
Slide41. Who are these third parties?
the main one is FFI: foreign financial institution.
An FFI is any
non-US entity that
accepts
deposits
(
e.g. a bank)
holds
financial assets
for others
(e.g. a
custodian, some trusts)
invests or trades financial assets as a business (
e.g.
a mutual fund)
an
insurance
company
there are other third parties but we will focus on FFIs
Slide52. How
will
FFIs ensure
their customers are not US persons?
Ask new customers to sign documents saying they are not US
persons
Search existing accounts for ‘indicia’ of US person status
Only
have
to do this once account exceeds $50k for individuals, $
250k for
entities; $250k for life insurance
but
can
search all accounts
Under IGA, may not have to search certain
govt
-sponsored accounts (e.g. retirement, education savings plans)
If they find indicia, ask customers
to
provide documents showing or stating that they
are not US
persons
Slide6What the FFI is looking for
account holder identified as a
U.S. citizen or resident
birthplace in
the U.S.
a
U.S. telephone number
a
U.S. residence or mailing
address
standing instructions to transfer funds to a U.S. based accountIndications of a power of attorney over the account to a person with a U.S. addressa “care of” or hold mail address as the sole address
For individuals with account 50k to 1m, FFI only has to search electronic recordsFor individuals with accounts > 1m, FFI must search paper records as well
Slide7Withholding Certificate
Slide8Withholding Certificate
Slide9What the FFI will do if they find these indicia
Indicia
U.S
. citizen or resident
Birthplace in the U.S
.
U.S
. telephone
number alone
U.S. telephone # +
n
on-US telephone #U.S. residence or mailing addressstanding instructions to transfer funds to a U.S. based accountIndications of a power of attorney over the account to a person with a U.S. address“care of” or hold mail address as sole
address
Document request
WHC
+
PFC
PFC
+
CLN
or
WHC
+
PFC
+ reasonable explanation
WHC
and PCFSWHC or PCFSWHC and PCFSWHC or PCFS
FFI can rely on valid documentation unless actual knowledge or reason to know the info is unreliable or wrong
WHC: withholding certificatePFC: proof of foreign citizenship via govt issued IDCLN: certificate of loss of nationalityPCFS: proof of claim of foreign status A: Cert of Residence from tax authority B: Govt-issued ID C: approved similar certificate
Slide10What
will
FFIs do
if they think their customers are US persons?
If no IGA in effect:
request waiver of any right that would prevent FFI from sending info to IRS
Once received, report name, account numbers & amounts, TIN, gross proceeds,
etc
to the IRS (assume open book)
If not received: close account
If IGA is implemented:report name, account numbers & amounts, TIN, gross proceeds, etc to the tax authority (e.g. CRA) for delivery to IRS
Slide11What
do I have to do as a customer?
Upon receipt of a request for documentation:
Check to make sure it is the required documentation
Respond accordingly; or
Choose not to respond, close
account; or
Choose not to respond, await account closure