Foreign Account Tax Compliance Act (FATCA)

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FATCA

What is FATCA?

The United States (U.S.) Foreign Account Tax Compliance Act (FATCA) is rapidly becoming the global model for combating offshore tax evasion and promoting transparency.

FATCA, enacted in the U.S. in 2010, seeks to obtain information on accounts held by U.S. taxpayers in other countries. It requires U.S. financial institutions to withhold a portion of payments made to foreign financial institutions (FFIs) that do not agree to identify and report information on U.S. account holders. FFIs have the option of entering into agreements directly with the U.S. Inland Revenue Service (IRS), or through one of two alternative Model Intergovernmental Agreements (IGAs) signed by their home country.

Effective September 30, 2017, Financial Institutions in Trinidad & Tobago began FATCA reporting to the Board of Inland Revenue, as is required under the Model 1 Inter Governmental Agreement (IGA), which was signed with the US government in August 2016.

What is required of Republic Bank Limited?
  • Report annually to the Board of Inland Revenue, information on the following customers:
    • U.S. persons
    • US Entities
    • Non-US Entities with substantial US ownership
    • Passive Non-Financial Foreign Entities (Passive NFFE’s) with substantial US ownership
    • Non-Participating Foreign Financial Institutions (NPFFIs)
  • Report accounts of certain customers who fail to provide sufficient information to determine their US Status These customers will be deemed ‘Recalcitrant’.

Republic Bank intends to meet all obligations imposed under FATCA in accordance with the Model 1 IGA Agreement, local banking and tax regulations.

What customers are affected?

Customers with US Indicia who are deemed to be a US Person/US Entity and hold cumulative deposit balances above a specified limit.

What is an FFI?

Broadly speaking, it is any financial institution which is a non U.S. entity that:

  • Accepts deposits in the course of a banking or similar business;
  • Holds financial assets for the account of others as a substantial part of its business;
  • Is engaged primarily in business of investing, reinvesting or trading in securities; and
  • Is an insurance company (or the holding company of an insurance company) that issues or makes payments with respect to a financial account:
    • Banks
    • Broker dealers
    • Asset managers and investment funds
    • Insurance companies other than pure property and casualty (general insurance) or pure term life entities
    • Trust companies
    • Other financial intermediaries (such as custodians and related service providers)
    • Credit unions and cooperatives
Who is a U.S. Person for FATCA purposes?
A U.S. person is:
  • A citizen or resident of the United States (including a green card holder)
A U.S. Entity is:
  • A partnership, corporation, estate, trust incorporated or created under U.S. law (U.S. incorporated entity) (U.S. incorporated entity)
  • A non U.S. incorporated entity having shareholding of 10% or more or ownership held by –
    • A U.S. Person
    • An U.S. incorporated entity
What should you do?
  • Complete our ‘Declaration of U.S. Status’ to determine whether you are a U.S person/Entity
  • Inform Republic Bank of any changes relating to your U.S. status

The completed ‘Declaration of U.S. Status’ form can be submitted to any branch of Republic Bank. This Form is also available for completion at any branch.

What will happen if you do not comply?

In keeping with the reporting requirements outlined for countries that have entered into a Model 1 IGA Agreement, we will be required to report you as ‘Recalcitrant’ to the United States Inland Revenue Service via the Board of Inland Revenue.

Should you have any questions relating to the Bank’s requirements, please email us at customercare@rfhl.com

For updates and further information on FATCA, please visit the IRS FATCA page at www.irs.gov/FATCA

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