FATCA LegislationFATCA is a significant piece of legislation that will impact many U.S. and non-U.S. entities, both financial and non-financial. Under FATCA provisions foreign financial institutions (FFIs) are expected to sign an agreement with the U.S. Internal Revenue Service (IRS) identifying any U.S. person accounts and to report certain information on an annual basis. In addition, both U.S. financial institutions and FFIs will be required to report details to the IRS regarding substantial U.S. owners of non-financial foreign entities (NFFEs) unless under an intergovernmental agreement (IGA) is signed.
Penalties for non-compliance are potentially severe. A non-compliant FFI or NFFE may be required to apply a 30 per cent withholding tax. The institution may also be held liable for any tax that it fails to withhold, plus interest and penalties.
Compliance requirements will begin at the start of 2013 and will continue to be phased in through to January 2017. While some components of the legislation have yet to be confirmed, there is sufficient guidance available to help organisations prepare for full compliance with FATCA.
Thomson Reuters offers a FATCA compliance package that enables organisations to easily comply with key provisions of the Act. While other service providers offer legal and accounting expertise or account processing software, Thomson Reuters offers an integrated and modular solution. With our market leading software, intelligence databases and reporting capabilities, we offer the only full service, effective and convenient response to FATCA.