FATCA - Frequently Asked Questions

What is FATCA?

FATCA is United States (US) legislation that came into effect on 1 July 2014 and that seeks to prevent tax evasion by US Persons through the use of accounts held outside the United States. FATCA requires financial institutions outside of the US to collect information about their clients’ tax status under FATCA and report annually, information on financial accounts held by US Persons to the US IRS or the relevant tax authority.

 

Are we participating in FATCA?

We are participating in FATCA and meet the definition of a Foreign Financial Institution (FFI) with the United States (US) Internal Revenue Service (IRS). We will carry out the due diligence, reporting and withholding tax requirements of FATCA in accordance with any relevant Intergovernmental Agreement (IGA) and local legislation.

 

Will we be reporting your information to the United States Internal Revenue Service?

If you are a United States (US) Person, an entity incorporated in the US, or a US beneficial owner of certain categories of entities (as defined in the FATCA regulations), then we may be obligated to report, on an annual basis, information regarding financial accounts held by you to the either the Barbados Revenue Authority, the Internal Revenue Service (IRS), or a local tax authority in accordance with Intergovernmental Agreement (IGA) that has been entered into between the US and the country’s governing authority.

 

Will we be withholding tax on any of your US source payments?

We are obligated to withhold tax on United States (US) source payments to Foreign Financial Institutions (FFIs) that are not participating in FATCA (non-participating FFIs) and on payments to clients who do not provide the required documentation (recalcitrant account holders) in accordance with the FATCA regulations from 01 July 2014.

 

Will we still require documentation from you for FATCA if you do not have any US connections?

As an individual client, there are occasions where we may require from you US tax forms even if you are not a US Person. It may be that there is some information in the documentation that indicates US status and therefore further due diligence is required.

We will require US tax forms from all entity clients. The form certifies whether or not, you or your business, has any US tax reporting responsibilities. If this tax information is not received from you, please note that we may be required to withhold tax on certain US source payments.

 

Where can more information on FATCA be found?

You can find out more about the regulatory obligations related to FATCA on the United States (US) Internal Revenue (IRS) FATCA webpage.

 

When did FATCA come into effect?

FATCA came into effect on 01 July 2014.

 

How did FATCA come about?

Arising from concerns of tax evasion by US Persons, US congress enacted FATCA in 2010 to target non-compliance by US taxpayers using foreign accounts.