Foreign Account Tax Compliance - (FATCA)

tax compliance

Introduction

The Foreign Account Tax Compliance Act (FATCA) is a US legislation designed to improve tax compliance by US persons, both individuals and entities, who hold financial assets and accounts outside of the US, either directly or indirectly through financial institutions, entities or other structures. The income from such assets may be subject to US taxation and from 1 July 2014 FATCA will require financial institutions globally to identify and subsequently report the accounts of US persons.

Given the wide-ranging scope of the legislation, FirstBank has registered with the IRS for FATCA purposes and our Global Intermediary Identification Number (GIIN) is F8DB0C.00010.ME.566.

Customers

Effective 1 July 2014, when opening a new account, additional information and documentation may be requested from customers to ascertain whether the account is owned by a US person and also to determine classification of entity accounts for FATCA purposes.
  • An individual customer is a US citizen , who has a US passport or green card or with ;
    • A place of birth in US
    • US residence or mailing address
    • US telephone number
    • Standing instructions to transfer funds to US based account(s)
    • Power of attorney or signatory authority granted to person with US address; or
    • ‘In care of or hold mail address that is sole address of account holder
  • Corporate Customers are ;
    • Individual shareholders who qualify under the individual customer conditions and with a minimum of 10% shares in companies who execute transactions with First Bank.
    • Corporate organizations incorporated in the US with a minimum of 10% shareholding in companies who execute transactions with First Bank.
The Bank in line with FATCA requirements, has also reviewed its existing customers base to ensure that US owned accounts and entity accounts are correctly identified and reported where required.

We would communicate further with our existing customers that fall within the scope of FATCA.

Withholding

In order to ensure compliance, FATCA requires financial institutions, in some circumstances, to apply a 30% withholding tax on US source payments of income made to non-compliant financial institutions, some entities (entities with substantial or controlling US owners) and to non-compliant individuals known as Recalcitrant account holders.

Reporting

It is pertinent to note that commencing from March 2015, the Bank will be required to annually report to the IRS information concerning the accounts of US persons, non-compliant account holders and certain US owned entities. Please note that customers who do not provide requested information will be treated as non-compliant/recalcitrant and will be reported.