Enacted in March 2010, the Foreign Account Tax Compliance Act is one of the most significant tax enforcement measures ever undertaken by the United States. The law, commonly known as FATCA, requires financial institutions outside the US, including banks, broker-dealers and investment firms, to report substantial information to the Internal Revenue Service about accounts held by US citizens. Starting in January 2013, foreign institutions must register with the IRS as covered entities. Those that fail to report will face a 30 percent withholding tax on any payments or income due to them in the United States.
The law and its accompanying regulations will add significant compliance duties to financial institutions in the US and overseas. Knowing the requirements and implications of FATCA is necessary for any compliance officer, tax attorney or other financial crime professional involved in the tax field.
Below are some critical resources related to FATCA, including laws and regulations, notices from the US government, and white papers from the private sector and academic sources. ACFCS will be constantly updating this page with more resources as FATCA implementation continues.
US Law and Supporting Documents Related to FATCA
|Hiring Incentives to Restore Employment ActPublished March 18, 2010Download Here||The full text of the US legislation that created FATCA, which became law on March 18, 2010. The relevant parts of the document that refer to FATCA are on pages 25-52 in PDF or pages 22-49 if printed.|
|US Senate Joint Committee on Taxation’s “Technical Explanation of the Revenue Provisions Contained in the Hiring Incentives to Restore Employment Act”
Published February 23, 2010Download Here
|As part of the development of the HIRE Act, the US Senate’s Joint Committee on Taxation prepared a detailed description of FATCA provisions. The document discusses the present law on taxing US accounts overseas and describes changes FATCA would bring about. The relevant parts of the document that refer to FATCA are on pages 25-87 in PDF or pages 22-84 if printed.|
US Treasury and IRS Regulations, Notices, Statements and Forms Related to FATCA
|Internal Revenue Service’s “Proposed Regulations Related to Reporting by Foreign Financial Institutions and Withholding on Certain Payments to Foreign Financial Institutions and Other Foreign Entities “Published February 8, 2012Download Here||A 398-page document detailing the IRS’s proposed rules for implementing certain provisions of FATCA. Describes which foreign financial institutions would be required to report tax information on US customers under FATCA, and what types of accounts would be covered by the law. Also provides further details on the withholding tax and the system of “pass-through” payments.|
|US Treasury’s “Joint Statement from the United States, France, Germany, Italy, Spain and United Kingdom Regarding an Intergovernmental Approach to Improving International Tax Compliance and Implementing FATCA”
Published February 8, 2012Download Here
|Released February 8, this Statement announces an agreement to set up an automatic process of reporting tax information between the US and the five European nations. The Statement provides a brief outline of this reporting process and commits to further cooperation between the nations involved on FATCA implementation.|
|Internal Revenue Service’s “Chapter 4 Implementation Notice”
Published July 2011Download Here
|This Notice describes the timeline for the implementation of FATCA and discusses issues to be covered in the proposed regulations by the Treasury and IRS.|
|Internal Revenue Service Form 8938, “Statement of Specified Foreign Financial Assets”
Published November 2011Download Here
|A form created by the Internal Revenue Service in response to new FATCA reporting requirements, it is used by US citizens for reporting funds or assets held at overseas financial institutions over certain specified limits.|