What is FATCA?
“FATCA” is the abbreviated term used in reference to the US Foreign Account Tax Compliance Act (enacted by chapter 4 of the Hiring Incentives to Restore Employment Act). The stated objective of the US Government is to reduce tax evasion by preventing “US Persons” from using offshore entities to launder money.
When did FATCA become law?
FATCA was enacted into law in March 2010.
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When Does FFI Registration Become Effective?
The IRS portal for FFI registration opened on August 19, 2013. An FFI must register online by April 25, 2014 to be included on the first published IRS list of FFIs to be released on June 2, 2014. The earliest effective date of an FFI agreement is June 30, 2014.
Is JN Bank complying with FATCA requirements?
JN Bank and its affiliated companies are fully compliant to avoid severe restrictions that will be imposed on non-compliant financial institutions. We also want to serve all our customers transferring money to or from US banks.
What is required of JN Bank to comply with FATCA?
- Enter into an FFI agreement with the IRS that states its intent to comply with FATCA
- Conduct due diligence for new and existing accounts to classify account holders or investors as either U.S. or non-U.S.
- Report account information directly to the IRS or indirectly through their national government, which have signed Intergovernmental Agreements (IGA).
How has JN Bank implemented the changes?
- Identified members who are likely to be affected by FATCA
- Informed all our members about the US law and its requirements
- Trained employees facing customers, on FATCA requirements
What if I refuse to provide my information?
You must consent for your information to be disclosed to the US. However, with the Model 1 IGA, consent by a US status person or recalcitrant account holder may not be required since the data will be passed to the Jamaican authority, responsible for FATCA, who will share the data with the US Treasury Department. The US law also requires all financial institutions to withhold a 30% tax on accounts, where a person refuses to provide information to determine if he or she is a “US Person.”
What is meant by US Tax Classification?
US Tax Classification refers to either “United States Person” or “Foreign Person”.
- Dual citizen, one of which is US citizenship
- US citizen residing outside the US
- US passport holder
- Born in the US
- ‘Green Card’ holder
- Non-US citizen who has substantial presence in the US, for at least 183 days (6 months)
US Tax Form Type: When do I complete a W9 or W8 form?
What is a W8 and W9 form?
What is GIIN?
When Does Client Due Diligence Become Effective?
FATCA will enforce new account opening processes and procedures, effective July 1, 2014. A phased approach will be taken to enforce remediation on pre-existing accounts, based on whether the accounts are:
- prima facie FFIs, whereby the deadline is December 31, 2014
- high-value individual accounts, whereby the deadline is July 1, 2015
- (3) all remaining accounts, whereby the deadline is July 1, 2016.