FATCA

On March 18, 2010 the United States (US) Government enacted the Foreign Account Tax Compliance Act (FATCA) to combat tax evasion by US persons holding investments in offshore accounts. FATCA requires Foreign Financial Institutions (FFIs) to provide the US Internal Revenue Service (IRS) with information on certain US persons invested in accounts outside of the US and for certain non-US entities to provide information about any US owners. The Grenada Co-operative Bank Limited (Co-op Bank) is considered an FFI and intends to satisfy all obligations imposed under FATCA in accordance with the local banking and tax regulations.

Things You Should Know

    1. Who must comply with FATCA?
      US Persons and Financial Institutions
    2. Who is a US person for FATCA purposes?
      A US person refers to:
      – A US citizen or resident of the United States (including a green-card holder)
      – A partnership or corporation organized in the United States or under the laws of the US or any state thereof
      – A trust, if:
      – A court within  the US would have authority under applicable law to render orders or judgements concerning substantially all issues regarding administration of the trust, and
      – One or more US persons have authority to control all substantial decisions if the trust, or an estate of a decedent that is a citizen or resident of the United States.
      – A non-US incorporated entity having shareholding of 10% or more held by:
      – An individual who is a US person as described above; or who has a US address or US “in care of” or “hold mail” as a sole address
      – A US incorporated entity, as described above
    3. How Will FATCA work?
      FFIs are required  to review their customer database for US indicia* to identify the accounts that may belong to US persons. *US indicia refers to the specific indicators that determine whether you may be a US person, which include:
      – Customer identification as a US citizen or resident (through a U.S.) passport, green-card or other relevant documentation);
      – Unambiguous indication of US place of birth
      – US mailing or residence address (including US P.O. Box);
      – US telephone number;
      – Standing instructions to transfer funds to an account maintained in the United States;
      – Effective power of attorney or signatory authority granted to a person with a US address; or
      – An “in-care-of” or “hold mail” address that is the sole address on file for the customer.
      FFIs are required  to submit information on customers who are US persons (by way of having US indicia) and also hold an aggregate balance of:
      – USD $50,000 or greater for individuals
      – USD $250,000 or greater for business/entities
      In summary, to be reported you must:
      – Be a US person AND
      – Have an aggregate balance, which meets or exceeds the threshold stated
    4. How will YOU be impacted?
      FATCA will have no impact on the vast majority of customers. Customers’ accounts will be scrutinized to identify the accounts having US indicia.
      Existing Customers;
      – Customers holding accounts which pre-date the FATCA effective date may be asked to provide additional information and documentation to determine whether or not they are US persons once US indicia is identified.
      New Customers;
      – The implementation of FATCA requires a change in the Bank’s account opening procedures;
      – Customers will now be asked to confirm whether or not they are US persons
      – Additional information and documentation may be requested to prove or disprove a US connection
      – Customers will now be required to disclose their US Tax Identifying Number (TIN) once they have indicated a US status
    5. When does FATCA commence?
      FATCA commenced on July 1, 2014.
    6. Will my US Dollar Account be reported?
      The currency of the account does not determine whether or not the customer information is reportable. FATCA requires information to be reported on accounts held by US Persons who meet one or more of the criteria used to identify a US person and with an aggregate balance above the reporting threshold regardless of account currency.
    7. If I qualify as a US Person, how will I be affected?
      If you satisfy the criteria outlined for a US person, you may be required to submit further information to your Financial Institution. Customers are advised to seek further advice from a tax professional.
    8. How are joint accounts affected by FATCA regulations?
      If any party to an account satisfies the criteria to qualify as a US person and the account balance is above the reporting threshold, FATCA requires that this account be reported. Customers are also advised to seek further advice from a tax professional.
    9. How can I stay informed?
      We will endeavour to keep you informed by posting updates on our website as information and new developments about FATCA are released. For further information and updates on FATCA, please visit the IRS website at: http://www.irs.gov/FATCA