FATCA

FATCA refers to the Foreign Account Tax Compliance Act. It is a United States of America (US) piece of legislation which was signed into US law on 18 March, 2010 and became effective 01 July, 2014.

FATCA was enacted to tackle offshore tax evasion by US persons. To this end, it requires Foreign Financial Institutions (FFI(s)) to provide information on US Reportable Accounts held with the FFI to the US Internal Revenue Service (IRS).

On the 19th August, 2016 Trinidad and Tobago entered into a Model 1A Inter-Governmental Agreement (IGA) with the US and brought same into our local laws by the passage of the Tax Information Exchange Agreements (United States of America) Act, 2017 (TIEAA).
Pursuant to the TIEAA, the Board of Inland Revenue (BIR) was appointed the competent authority for the purpose of FATCA reporting. All reporting financial institutions within Trinidad and Tobago are required to provide the BIR with information on US Reportable Accounts held by US persons.
In addition, pursuant to S.13 of the TIEAA, a financial institution may forward to the BIR sensitive personal information on an account holder in respect of a reportable account for FATCA purposes without the consent of the account holder. The BIR upon receipt of this information must then forward same to the IRS who is the competent authority in the US.

Under the terms of both FATCA as enforced by the TTIEA, First Citizens Bank Limited (the Bank) is required to provide reports to the BIR on an annual basis effective 30th September, 2017 on accounts held by:

• US Persons
• US Entities
• Non-US Entities with substantial US ownership
• Passive Non-Financial Foreign Entities with substantial US ownership; and
• Non-Participating Foreign Financial Institutions

All customers of the Bank are required to declare whether or not they are a US Person. This is done by way of signing the Bank’s Customer Declaration Form. Customers are also required to notify the Bank immediately of any changes which may affect their status.

Citizens and residents of the United States of America (green card holders included)
Corporations and partnerships created under the laws of the United States of America.
Estates and trusts created under the laws of the United States of America or where :
(a) a court within the United States of America would have authority under applicable law to render orders or judgments concerning substantially all issues regarding administration of the trust; and
(b) one or more US Person has the authority has the authority to control all substantial decisions of the trust, or an estate of a decedent that is a citizen or resident of the United States of America.

While evidence of one or more of the following does not necessarily mean that a customer is a US Person the Bank may be able to determine whether a customer is a US Person by the following US Indicia:

US person citizenship (lawful permanent resident/ green card holder);
A US place of birth/ incorporation;
A US address i.e. residence address or mailing address in the US (including US post office box);
A US telephone number;
Standing order instructions to transfer funds to an account maintained in the US or directions regularly received from a US address;
A US “in-care-of” or “hold mail” address that is the sole address the FFI has identified for the account holder;
A power of attorney or signatory authority granted to a person with a US address.

Where a customer has US Indicia and is in fact a US Person the customer is required to declare same to the Bank. Where the customer may have met one of the US indicia requirements but claims they are not a US Person the customer must provide documentation in support of this claim.

In accordance with the Model 1IGA requirements, where an existing customer fails to declare their/ its status as a US Person, the Bank will be obligated to report such a customer as ‘Recalcitrant’ to the US via the BIR.
A recalcitrant account holder is someone who does not consent to providing information or does not comply with reasonable requests for information that is necessary to determine whether their account is a reportable account.

A US Reportable Account is a financial account maintained by the Bank which has been identified as reportable after the application of set due diligence procedures and held by one or more US Person or by a Non-US entity with one or more controlling person that is a US Person.

The current threshold amount for the total balance of all accounts held by a US person is USD$50,000.00 (or its equivalent in other currencies). In the case of accounts operated by US-Entities, the threshold amount is USD$250,000.00. Please note that these threshold amounts are subject to change.

No- FATCA applies to many other types of accounts: business accounts, investments and brokerage accounts as well.

Reporting is only influenced by your US Person status and not by the account currency.

A joint account which has one US Person as an owner is treated as a US Reportable account and the entire account shall be subject to reporting.
Where the joint account has more than one US Person as an accountholder ,each holder will be attributed the entire balance or value of the account.

As stated earlier, pursuant to S 13 of the TIEAA the Bank is not required to obtain the customer’s consent prior to meeting its reporting obligations under the TIEAA.

Further information on FATCA can be found @ https://www.irs.gov/FATCA.