FATCA Declaration
Foreign Account Tax Compliance Act (FATCA) is a tax information reporting regime that requires the identification and reporting of U.S. accounts to the U.S. Internal Revenue Service.
Contents
Introduction to FATCA
The Foreign Account Tax Compliance Act (FATCA) is a U.S. tax law that aims to combat tax evasion by U.S. persons holding investments in offshore accounts. Under FATCA, foreign financial institutions (FFIs) are required to report certain information about financial accounts held by U.S. taxpayers, or by foreign entities in which U.S. taxpayers hold a substantial ownership interest.
FATCA was enacted in 2010 as part of the Hiring Incentives to Restore Employment (HIRE) Act, and is designed to increase transparency for the Internal Revenue Service (IRS) with respect to U.S. persons who may be investing and earning income through non-U.S. institutions.
Purpose of Declaration
The FATCA declaration is a self-certification form that individuals and entities must complete to declare their U.S. or non-U.S. tax status. This declaration helps financial institutions determine whether they need to report certain account information to tax authorities under FATCA regulations.
Benefits of Compliance
- Avoid potential withholding tax (30%) on U.S. source income
- Maintain good standing with financial institutions
- Prevent account restrictions or closure
- Ensure compliance with international tax laws
Risks of Non-Compliance
- 30% withholding on certain U.S. source payments
- Potential account closures by financial institutions
- Additional scrutiny from tax authorities
- Potential legal penalties
Who Needs to Declare
The FATCA declaration is generally required from individuals and entities who are:
Individuals
- U.S. citizens or U.S. tax residents (including Green Card holders)
- Individuals with a U.S. place of birth
- Individuals with a U.S. address or U.S. telephone number
- Individuals with standing instructions to transfer funds to an account maintained in the U.S.
Entities
- U.S. corporations, partnerships, or associations created or organized in the U.S.
- Non-U.S. entities with substantial U.S. owners (generally, owning more than 10%)
- Passive Non-Financial Foreign Entities (Passive NFFEs) with U.S. controlling persons
- Financial institutions that are not participating FFIs or deemed-compliant FFIs
Important Note
Even if you are not a U.S. person, you may still need to complete a FATCA declaration to certify your non-U.S. status. This helps financial institutions confirm that they do not need to report your account information under FATCA.
Declaration Form
The FATCA declaration form typically includes the following information:
Full name and address
Country of tax residence
Tax identification number (TIN) if applicable
Place of birth
Declaration of U.S. or non-U.S. status
Signature and date
Contact Us
If you have any questions about FATCA requirements or need assistance with your declaration, please contact us at:
DSR GROUP MANDSAUR
Address: DSR GROUP MANDSAUR, 117 Nemi Nagar Kothari Colony, Street No 3 (Motilal Oswal Financial Services), Mandsaur, Madhya Pradesh, 458001
Email: dsrgroupmandsaur@gmail.com
Phone: Mobile: +91-9024138649, Landline: 07422 - 496399