Non-US financial institutions must meet the requirements of the Foreign Account Tax Compliance Act (FATCA). This means they must identify their US account holders and report on them annually to the US Internal Revenue Service (IRS). The United States has agreements with over 100 countries to implement FATCA reporting and withholding procedures. FATCA has also led to the development of the Common Reporting Standard (CRS) for the automatic exchange of tax and financial information on a global level.
We help you figure out your organisation’s reporting obligations
The Anaford team looks at a number of factors to determine whether your organisation is subject to exchange of information reporting obligations like FATCA and CRS. If your organisation does need to report US account holder data, we guide you with the practical steps you need to take to stay compliant.
In particular, we create in-house due diligence processes for institutions to ensure ongoing compliance with these requirements.
Foreign financial institutions (“FFIs”) must meet FATCA requirements to:
Undertake account holder identification and due diligence procedures.
Report annually to the IRS on its account holders who are US persons or foreign entities with substantial US ownership.
If foreign financial institutions do not comply, they will be subject to 30% withholding tax on any payments of US source income, as well as gross proceeds from the sale of securities that generate US source income.
CRS Requirements and Compliance
FATCA has driven other information reporting regimes, the most notable being the OECD Common Reporting Standards (CRS). The main aim of CRS is to find and report the data of any taxpayer back to their country of residence.
We can assess whether your account or structure is subject to CRS reporting obligations and if so, the steps you should take in order to be compliant.
CRS compliance is complex, and various views are possible in relation to an account or structure. In the event a bank or financial intermediary has a different view about how you are affected, we can discuss your reporting obligations with them.
We can also advise on how your reporting obligations may change if you move countries or your structure is modified or restructured.
FATCA / CRS and Reporting for Fiduciaries, Banks and Corporations
Assessment of reporting obligations – We assess whether your organisation is subject to exchange of information reporting obligations (FATCA and CRS) and if so, the practical steps you need to take to stay compliant.
Beneficiary statements for fiduciary companies – We advise you on and prepare Foreign Grantor Trusts and Foreign Non-grantor Trust Beneficiary Statements for fiduciary companies where a trust or foundation has US person beneficiaries. The IRS requires these statements for any US person receiving a benefit from a non-US trust.
Tax compliance software solutions for banks and financial institutions – We develop software solutions specific to each organisation to automatically process the relevant client data to create and deliver reports to you. This allows your organisation to meet its reporting requirements. We comply with all applicable confidentiality rules, FINMA and other regulations. We have implemented solutions for several large, international financial institutions. Read more about our Corporate & Commercial services.