Annex additional information for FATCA. Fatca forms
The fact that today the US citizen is becoming increasingly popular, we are largely obliged to law adopted in this country in 2010 and entered into force on 01.07.2014 "On Tax Compliance Act - Fatca). The idea of \u200b\u200bthe adoption of this law arose when the US government was calculated by inconspicuous taxes. Their amount approximately amounted to $ 100,000 billion, and these are only offshore schemes without taking into account the contributions of citizens in foreign banks. As a result of the calculation, it was decided to take measures to correct this problem in the form of a bill, which after signing the head of the American state entered into force. Which was the main cause of a large number of failures from US citizenship among its residents living and working in other countries.
What is Fatca
Fatca - what is it? This tax law, adopted in the United States, which obliges foreign financial organizations to report to the tax service of this country (IRS) on customers who are American taxpayers. The official goal of the adoption of FATCA is to prevent American citizens' care from taxes. According to the US law, all individuals and legal entities who have citizenship or being residents of this country are obliged to pay tax, regardless of the place where they live and receive income from labor activity, lead business or own property. But this state of affairs does not suit many citizens, so they try to lead financial activities through banks outside their country.
Before the adoption of the law somehow monitor their financial activities and receive information on accounts in foreign banks, the relevant US services had no opportunity. But the situation has changed dramatically after the entry into force of Fatca. What did it give special services? Since that time, all countries or their financial institutions should transfer information to FATCA in IRS on customers who are America taxpayers. The law is, to put it mildly, arrogant, as it affects the interests of not only US citizens, but also legal entities of all other states.
Impact levers, Fatca control method
To freely transfer FATCA information, foreign financial institutions or countries are invited to conclude special agreements with the appropriate US service to ensure control over the accounts of taxpayers of the American country. All those who refused to offer a number of surprises, which include such measures as sanctions, forced to hold 30% of customer translations through the US banking system, as well as through banks that signed such an agreement, or even closing access to the main reserve currency for entire countries With the subsequent reduction in the part of international trade. Therefore, behind the signing of the Agreement lined up an impressive queue, consisting of various states and individual financial organizations, which understand what significance the US system has a value in the movement of funds, but at the same time try to avoid violations of the law on privacy. The agreement can be concluded not only with various countries in intergovernmental form, but also with individual financial institutions, if the state, in the territory of which they lead their activities, for any reason cannot accept this agreement.
Models of agreements
Since the FATCA law provides two options for intergovernmental agreements, the information provided for by them are also two:
- According to the first model, financial organizations take reporting on customer accounts relating to American taxpayers in the internal services of their country. Subsequently, these services are transmitted to special US services.
- The second model implies the transfer of data on such clients by the financial organizations themselves who have entered into a direct agreement with the US tax authorities.
By 2017, the intergovernmental agreement was not signed for the transfer of information for FATCA. What does this mean for Russian citizens? Formally banks and other organizations are not obliged to report to America's services. But this circumstance promises unwanted problems with the clients of Russian financial institutions in calculations and transactions through American corschet in the form of sanctions.
Russian legislation gives good to domestic banks on the transfer of information to US services
As a result of hot discussions of the Russian government on the subject of entry into force of Fatca, its possible consequences and contradictions with the laws of the Russian Federation, the head of state was signed by the law, designed to help domestic financial companies to register on the US Tax Services website to comply with FATCA. What does Russian organizations allow Russian organizations? On legal basis to transfer the required information about American taxpayers under the Information Exchange Agreement, but only with the consent of the Client. If it receives a denial of data transfer, any bank has the right not to work with this person. All data before transfer must pass through the Central Bank and the Rosfinmonitoring, which has the right to stop it.
Fatca reporting form
In an attempt to exclude unwanted retention with customers' accounts, 90% of banks and organizations from Russia in a private manner went to the agreement and registered in the US Federal Service. Therefore, when opening accounts, many banks today can be encountered with the inevitability of filling in a specific document. Fatca shape is a small form, with which it is easy to determine the need to transfer information about this client to America's services. If the client is not related to taxes in the United States, then information will remain closed for American services.
Concerns bankers
Such a mechanism for collecting information may not be enough effective that the result is the cause of fines, deductions or losses of companies obtained during the registration of identification numbers (GIIN). The lack of such a number of financial institutions is the basis for applying sanctions for FatCA non-performance. The number of domestic institutions that will be able to save GIIN after data transmission, in 2017 it remains unclear. Many bankers express concerns that the American government, if desired, find a lot of violations in the actions of Russian organizations. Therefore, the threat of sanctions in connection with Fatca violations is more real than the possible blocking of payment systems that banks predicted. Fatca has many ambiguities and ambiguities that leave a wide schedule for services that control its execution.
Registration for Fatca, Sberbank. What is it?
One of the first organizations registered in the US tax (IRS) is Sberbank. The company in full force comprising the main department and 208 institutions controlled by him received the status of a financial institution that fulfills the FATCA requirements. What does it mean? Sberbank is obliged to identify those who relate to pay for taxes in the States. At the date of registration, the bank has about 20,000 customers who are citizens of America or are among the other categories obliged to pay tax in this country. These include:
Legal entities:
- organizations where residents have a fraction of more than 10%;
- companies with registration in America.
Individuals:
- american citizenship;
- green map;
- birth in America;
- postal address in the United States;
- american phone number;
- drawn up power of attorney to face with the address in the USA;
- the right to sign the person with the same address;
- instructions for transferring amounts in the United States;
- address "to demand" if it is the only one for the account.
In the future, the number of customers relating to these categories may increase, since there are no obstacles to serving persons who are ready to agree to transfer information to the States. This information is necessary to fulfill the mandatory conditions of FATCA (Sberbank). What does this change in service? Sberbank asks to fill out an additional questionnaire attached to the document package.
Procedure of the Bank
When working with Customers, Sberbank defines FATCA status for each based on the data filled questionnaires, and then generates a report. According to the results of the information received, those who are related to American taxes are revealed. Next happens:
- Informing the client about its signs of belonging to American taxpayers.
- Confirmation by the client status forms of W-9 or W-8. Or document confirmation of the inconsistency of this.
- Getting from the client consent to the transfer of data to the IRS. Either, in the absence of forms or documents of refutation, its transition to the status of refusal.
The fact of registration of Sberbank in the IRS obliges it to provide if necessary to access the US government to the accounts of the US taxpayers located in the Sberbank institution in the Russian Federation. At the same time, Sberbank does not see obstacles to fulfilling its regular responsibilities with the emergence of the need to inform the states about the accumulation of their taxpayers.
Russia's accession to the European Fatca
Soon Russia has to join Euro-Fatca. This is a new bill, similar to American on regulation, but in contrast to which, in the event of a refusal of cooperation, not penalties, but a full prohibition of activities for refusal books in the EU. Russia's accession is planned for 2018 within the framework of the 1988 European Convention, according to which the participants are obliged to assist each other and share information on tax matters. From the day of joining Euro-Fatca, Russian services will be able not only to transfer data on EU taxpayers, but also to receive information on European accounts of domestic citizens.
The phase is a Russified abbreviation from English, denoting the law of the United States of America on compliance with tax legislation regarding accounts opened abroad (Fatca - Foreign Account Tax Compliance ACT). This law is also called the "Law on Taxation of Foreign Accounts". In accordance with this law, foreign financial institutions (registered outside the United States) should inform the US Tax Service (IRS - International Revenue Services) about the so-called "US clients",
Including about those who live outside the United States.
- What is the purpose of the phater?
The phase was adopted in order to prevent tax evasion by US taxpayers - account holders open in financial institutions outside the United States or investment offshore instruments.
According to the requirements of the phase, financial institutions outside the United States are obliged to identify their customers based on certain criteria that are the common name of the "signs of the United States", and provide information on such clients to the tax authority in accordance with intergovernmental agreements signed between governments. USA and other countries.
- When will the position of the phase begin to apply?
KOMETSBANK KB AO informs the US Tax Service directly (not through the Ministry of Finance of the Republic of Moldova), in accordance with the 2nd-type Intergovernmental Agreement, signed by the Governments of the Republic of Moldova and the USA on November 26, 2014.
According to the Intergovernmental Agreement, KOMETSBANK CB, JSC registered on the IRS portal and received the GIIN code (Global Intermediary Identification Number): VY0Z9.99999.Sl.498By performing the requirements of the phak.
- Who affects the phase?
The positions of the phase affect the physical and legal entities, customers of financial institutions of the Republic of Moldova, having tax liabilities to the United States and receiving taxable income outside the United States, namely:
- american citizens and American tax residents;
- citizens without American citizenship, but at least 183 days in the United States, which are calculated as follows: All days during which you were in the country during the current year (at least 31 days), and 1/3 of the number of days during which You were in the country during the year, directly by the previous ones, and 1/6 of the number of days during which you were in the country during the second year preceding the current;
- uS legal entities;
- foreign non-financial legal entities (Non-SUA), the essential owners of which (with a share of at least 10%) are American citizens and tax residents.
Are not US residents for tax purposes: teachers, students, artists who are temporarily located on the territory of the United States on the basis of visas of the following categories: F, J, M şi Q.
- What does the status of "phase"?
The status of the "Fakka" is the status assigned by the Bank to its customers, individuals and legal entities that correspond to the criteria of the phase, and to which the bank must apply the procedures provided for by the phase.
- How will the phase of the clients affect?
All Customers Komertbank CBS will be subjected to identification procedure to establish their belonging to the owners of the US accounts. The owners of US accounts will be assigned the status of "Fakka" as a result of the identification of the "Signs of the United States" and they will have to provide the information requested by the Bank.
- What are the consequences for customers who refuse to inform the Bank the information needed to establish the status of the "Fak"?
Customers who will not provide information on the basis of which the Bank will be able to make a decision to assign the status of "Pets", will be qualified as US accounts owners - refusal and information about them will be provided to the US Tax Service.
- What is understood by the "customer-refusal"?
Under the "customer-refusal" means the owner of a bank account, a physical or legal person, which:
- did not respond to the Bank's request for the provision of documents necessary to assign the status of the "Fakka" or the information necessary for the provision of the US Tax Service (the current form W-9, the correct name and number of the US taxpayer, etc.);
- did not agree to the provision of its personal data into the US Tax Service.
- What is the identification number of the US taxpayer (US TIN)?
The US taxpayer identification number (US TIN) is a number identifying an American taxpayer used by the US tax authority.
The US taxpayer number may be:
- SSN. (Social Security Number) - US Citizen Social Insurance Number;
- Itin.INDIVIDUAL TAXPAYER Identification Number - US taxpayer identification number;
- ATIN. (Adoption TaxPayer Identification Number) is the US taxpayer identification number, for children adopted in the United States.
- What are W-9, W-8BEN and W-8BEN-E formulations?
The Bank uses the information specified by the clients in the W-9, W-8BEN and W-8BEN-E form, to make a decision on the assignment of the status of the Faka. Customers independently fill and provide these form into the bank. Otherwise, customers will be considered "customer-crafts", which will result in the bank's actions described above.
To fill out these formulations, customers must be used by the instructions for filling them, which are published on the US Tax Service website (https://www.irs.gov):
Form W-9.filled in both individuals and legal entities and is a confirmation by the owner of the score of its status of a person related to the United States.
Form W-8Ben.filled only by individuals and is a confirmation by the owner of the score of its status of a person who has no relation to the United States.
Form W-8BEN-E Filled only by legal entities and is a confirmation by the owner of the account of its status of a person who has no relation to the United States.
- I am a client of KB Comertbank JSC. The bank told me that I have signs of the United States. Do I have to provide the bank the documents requested to them?
You are recommended to provide the requested documents to the bank. In case you do not submit to the bank the appropriate completed form, you will be considered a "customer-refusal" regarding the phase, and the bank will be forced to report your accounts to the US Tax Service, even if they are not sub
FATCA Law (Foreign Account Tax Compliance ACT) adopted in the US on March 18, 2010. The main goal is to prevent the avoidance of US residents from paying taxes. For Russian banks and many other financial institutions, this means that since 2016 it will be necessary to inform US Tax Administration (IRS) about all the accounts of American tax residents.
By December 31, 2015, most banks need to decide: either to join FATCA (PFFI - a foreign financial institution participating in FATCA) and report to US tax services about their customers who are interested in, or not to join and be in the NPFFI status (not joining FATCA foreign financial institution).
NPFFI status is associated with significant risks for banks. Most payments coming to the non-aligned financial institution from PFFI (who have joined FATCA financial institutions of the whole world) will be subject to a fine of 30% of the amount of payment. This refers to payments in favor of both NPFFI and its customers.
The Russian financial community has made its choice. By the summer of 2015, more than 90% of Russian banks joined Fatca (a complete list of joined financial organizations).
This material offers concrete steps that should be made to banks in the very near future - at the end of 2015 and early 2016.
Consider the basic business process for the preparation and provision in the IRS provided by the tax service of the form 8966. A generalized process is presented in the following scheme, to which we will refer to the items.
First of all, it is necessary to identify customers who may be American tax residents (p. 1.).
The main signs of the American tax resident for an individual:
- US citizenship.
- Resident status, i.e. Green Card.
- Place of birth in the United States.
- Address in the USA, postal address in the United States (incl. P / I).
- Phone number in the USA.
- Permanent instructions for transferring amounts in the United States.
- Power of attorney issued to a person with the address in the United States.
- Signature authority issued to the face with the US address.
- Address address as the only address for the account.
The main signs of the American tax resident for a legal entity:
- USA as a country of institution or registration.
- Organizations in which US Tax Residents have a share of over 10%.
If a feature detection indicating that the client may be an American tax resident (Account Holders with U.S. Indicia), Bank-PFFI must determine the FATCA-status client (clause 3). For this, the Bank collects the necessary information for correct identification and preparation of forms 8966 (p. 2). Depending on the FATCA status of the client, the Bank forms an individual report on each client or a summary report on all customers with a certain type of FATCA status.
Ideally, the sequence of actions is as follows:
Stage 1. . The client notify that he has signs of the American taxpayer.
Stage 2. Client or confirms your tax status form W-9 / W-8 or Provides documents confirming that he not It falls under the tax jurisdiction of the United States.
Stage 3. The client gives or does not give its consent to the provision of information in the IRS (clause 6). If he did not provide tax forms at the first stage, nor confirmation of what is not an American resident, he receives the status of Recalcitrant Account Holders with U.S. Indicia, and then there is no point in requesting permission from him to provide data in the IRS, individual reports on it in IRS are not sent.
The main FATCA statuses, on the basis of which the form 8966 is filled, look like this:
Client |
Allowed to provide information in the IRS |
Not allowed to provide information in the IRS |
||
Description |
Fatca Customer Status |
Folded parts 8966 |
Fatca Customer Status |
Folded parts 8966 |
Individuals: Legal entities registered in the United States for which there are no established restrictions |
Specified U.S. persons. |
Recalcitrant Account Holders That Are U.S. persons. |
Part 5 - one summary report on all customers for each Fatca status option |
|
Non-American companies (except financial), which are controlled by Specified U.S. persons. |
Passive NFFE WITH Substantial U.S. Owner (s) |
Recalcitrant Account Holders That Are Passive Nffes |
||
Individuals and legal entities having signs of American taxpayers |
Recalcitrant Account Holders WITH U.S. Indicia. |
|||
Financial companies (including bank) not participating in Fatca |
NON-PARTICIPATING FFI (NPFFI) |
|||
Customers holding inactive banks |
Dormant Accounts. |
It should be noted that the deadline when the bank must claim tax residents documents confirming the payment of taxes in the United States - June 30, 2016, and send data to the IRS for all customers needed earlier - until March 30, 2016.
Therefore, some banks have decided to transfer individual forms in IRS for all customers who have been allowed to provide data to IRS, which submitted the necessary information for form 8966, including TIN - the taxpayer identification number. Forms W-9 and W-8 These clients can transfer the bank later, until June 30, 2016.
Every year, before March 30 of each year, the financial institution should prepare for IRS information in form 8966 (clause 7) - individual for each resident (clause 7a) and consolidated by resident groups (clause 7b), in accordance with the Fatca designated above -status.
A formed report (representing an XML FATCA file) is encrypted and sent to the IRS using the International Data Exchange Service (Section 8).
This general scheme provided for FATCA has undergone changes due to the requirements of Russian legislation - Federal Law No. 173-FZ dated June 28, 2014 "On the peculiarities of financial operations with foreign citizens and legal entities ...".
The basic requirements of the law affect the business process of preparation of reporting for IRS:
Prohibition of information disclosure to US tax authorities for certain types of customers: It is prohibited to collect and transfer information to IRS on the accounts of individuals - citizens of the Russian Federation who do not have a second citizenship outside the countries of the Customs Union, or a residence permit in a foreign country.
The need to obtain permission from the regulator to transmit data to the IRS for each client.
Mandatory provision of all information sent to the IRS, also to Russian regulators.
To fulfill these requirements after identifying the client and defining its FATCA status, the Bank (p. 4) checks the ability to transfer data to the IRS, in accordance with 173-FZ, and if there are no general restrictions, then directly requests the regulator about the possibility of providing information. And only in case of obtaining permission from the regulator (clause 5), the Bank requests permission to provide information from the client itself (paragraph 6).
As a result, the provision of reporting in the IRS is a complex technological task even in the simplest, as described above. In practice, everything can be much more complicated.
For example, in the presented business process, it is understood that all data on customers, accounts, operations and incomes are stored in a single information system where the entire business cycle is organized: from the selection of "suspicious" customers before fixing the facts of correctly accepted IDS reports.
At the same time, in the practice of "at the entrance" there may be several accounts (and in large banks it is rather a rule than an exception). For example, interest income received on deposit accounts are taken into account in the ABS, in financial backies - dividends and coupon revenues. In this case, imports, control and consolidation of data are made to obtain all the information structured by customers: for all their accounts, operations and income.
Already, banks automatize the sending of data on clients in the IRS, and this is only the first, the simplest part of the FATCA requirements support.
From January 1, 2017, the refusal revenues will begin (those persons who refused to report their resident tax status) obtained from sources in the United States. The penalty will be a holding of 30% of FDAP (fixed, defined, annual and regular income). FDAP includes interest income, dividends, licensing deductions, rent, payment of services provided, revenue from the sale of American assets (including securities), etc.
This will require the correct calculation of FDAP income. To do this, it is necessary to determine the statuses of all "suspicious" payments and take into account all the envisaged exceptions. In addition, it will be necessary to deposit retained fines, to interact correctly with Russian regulators (until 173-FZ provides for the retention of the tax in favor of foreign tax authorities), etc.
By this time, all tax forms submitted by customers who received FATCA status should be kept in the bank. At the same time, the law provides not only the obligation of the bank to request the tax documentation, but also regulates the minimum storage time, it requires to record the date of receipt of the documentation and so on.
Thus, the fulfillment of FATCA requirements in 2017 will require efficient work with a large number of information that should be consolidated in a single solution. That is why for many banks, especially large or branched IT structures, it is necessary to comply with FatCA requirements, which will allow accounting and analysis of primary data transferred to IRS reports on all customers with various FATCA status, tax documentation and its deadlines receiving from customers, etc.
A year ago, after analyzing the entire package of requirements related to Fatca, we came to the need to create a specialized industrial decision "Programbank.Fatca.» .
Of course, large banks have become the first customers who quickly realized the scale of the problem and have already conducted the necessary preliminary work. Currently, we conduct two FATCA projects in banks from the top 50. One of them has Western shareholders, which places a number of additional requirements.
The principles of taxation have many pitfalls. Citizens of one country can live in another state, and the profit is received in the third. In such a situation, it is difficult to track their cash flows. Some residents hide their true revenues and do not fulfill tax liabilities. The problem of avoiding Americans from paying taxes was solved in 2010, when Foreign Account Tax Compliance Act was received in the United States. American law Fatca - what is it? Such a regulatory act is aimed at taxation of money stored in foreign banks. On this law, all financial institutions are obliged to report to the Tax Department of America, information about their accounts of American residents. The rule applies to all countries, including Russia.
Russian banks had two options: to join the program and report on the finances of their American customers or refuse and pay a fine by 30 percent of the profits of American assets. 90% of Russia's credit and financial organizations agreed to participate in this project. According to the requirements of American structures, they registered on the IRS website and entered the project participants. According to the norms of the law, they are obliged to identify their American customers in their citizenship, place of birth, the presence of Green cards, the address of permanent residence. All personal data and accounts on accounts Bank employees are issued in individual reports that are encrypted and sent to the Central Bank of the Russian Federation, Rosfinmonitoring and Internal Revenue Service USA (American internal revenue service). Upon receipt of a request for a particular resident from the IRS, the Russian bank undertakes to redirect a letter to the Central Bank and Rosfinmonitoring. These structures up to ten days will make a decision on the provision or prohibition of information transfer to the desired person to foreign tax service.
Fatca monitors bank accounts of American citizens abroad
Tasks of the Law
The purpose of this initiative is to legitimize and tax the tax hidden from the state finance of Americans who are stored in foreign territory. Thanks to this law, banking organizations of all countries monitor their customers. They find among them Americans and provide information about their cash manipulations on the bank's open accounts by American tax authorities.
Who relate to the norm Fatca
The law applies to individuals and legal entities who have a bank account in one country, and citizenship to another. The category of persons falling under the actions of the law include:
- People who are long in the territory of the states.
- Green Card owners.
- The presence of a passport of a US citizen.
- The American phone number, address and other contacts provided to the bank.
Such data financial firm can request from the client at any time. In some cases, additional information will be needed for FATCA. What is it? This includes a testimony from the State Department of America in the form of DS 4083, which testifies to the loss or refusal of citizenship of persons born in the United States. Optional documentation will also need when the account owner does not hide his financial situation, and the Bank asks to make a request for its identification number. For this, the client fills the W-9 form to generate the name of the payment recipient. In addition to it, you will need to prepare another document.
Banks are required to report on customer accounts
Filling the questionnaire
All personal data of their customers bank employees contribute to a special form. It then goes to the Tax Office of the States. Fatca profile includes several sections:
- surname and customer name;
- his birth date;
- passport details;
- address of constant or temporary registration;
- country of birth;
- an indication of states in which the client pays taxes.
Template is universal for all financial structures. Profile of the Sberbank Factory is compiled in strict accordance with the legislation of the Russian Federation. According to him, information on the movement of funds on the deposit relate to bank secrecy.
The questionnaire has an item where the client may refuse to provide personal information. This is permissible if it has the citizenship of the Russian Federation or the second citizenship in the member of the Customs Union of the UES.
Performance of the requirements of the law
Banks who adopted America's regulatory act registered on the website of the American Tax Office. After that, each organization recognized by the Financial Institute, which complies with the norms established by the United States. All participating banks received their GIIN (global intermediary identification number). Thus, Russian companies signed to comply with the requirements of American structures, to detect foreign individuals in their client base and provide information on their deposits and deposits. Reporting on American Customer Accounts Employees of Russian banks are sent to the States every year.
In the banking environment there was a serious excitement after the entry into force of the American law, known as Fatca. What does this mean and how this abbreviation is decrypted? The act on taxation of foreign accounts is federal law (Foreign Account Tax Compliance ACT) aimed at coercion of American citizens, including those who are constantly living outside the United States, to draw up annual declarations related to their foreign financial assets.
The international cooperation
The practical application of this provision requires assistance from the banking institutions of all countries of the world. The law adopted in 2010 obliges foreign financial institutions to check the availability of US citizenship from its customers. It is important to note that not only the possession of the American passport means the need to pay taxes in this country. The fact of birth in the United States and some other conditions can cause assigning the status of the person, accountable service of domestic income and subject to the FATCA law. What is this organization? The domestic income service is the main federal authority responsible for collecting taxes and compliance with financial legislation.
Tasks
According to unofficial information, American citizens who are constantly living in other countries were not the main goals of Fatca. The main task was to identify foreign assets of residents of the United States, which are not conceived by emigration, but preferring their money outside the Motherland. According to the calculations of the creators of the FATCA law, the return of such taxpayers in the field of view of the fiscal bodies should noticeably increase receipts into the state budget. According to some estimates, new rules concern about 9 million people. The FATCA law requires even companies and corporations that are not related to US jurisdiction if there are American citizens in their composition.
Analogies
It is almost impossible to find another state in the world using such dragon measures in the field of taxation. Eritrea conducts a similar policy regarding its citizens who are constantly living abroad. But this African country offers ex-patriots voluntary procedure for paying taxes. The uniqueness of the requirements of Fatca is that they are distributed not only to citizens. The individuals denoted by the unusual formulation of the person who have obligations towards the United States in terms of taxation are subject to this law.
According to unconfirmed data, the loss of the state budget, the reason for which the citizens are concealing their foreign assets, account for approximately 100 billion dollars a year. However, it is not possible to reliably determine the volume of undeclared income.
Participation of banks
The American law Fatca is embodied in practice by two basic ways. It requires foreign financial institutions to conclude an agreement with the internal revenue service. In accordance with this Treaty, banks assume that the identification of customers belonging to the category of American taxpayers in their databases. Financial institutions must disclose information about account holders corresponding to FATCA status. What does this mean? Names, addresses and transactions of persons suspected by banks in the presence of obligations to pay taxes in the United States are becoming known to the service of domestic income. Information on some types of accounts is not disclosed. This is mainly related to pension savings on which tax breaks are distributed.
Individual disclosure of information
US citizens with foreign financial assets should independently report them in the service of domestic income by filling in a special form. Fatca provides a fine of 40% of the amount of funds stored in a foreign account, in case of concealing information on its existence from the US authorities. Information about foreign assets may be crosslinked using financial institutions that entered into an agreement with the internal revenue service.
Identification
There is a list of standard signs indicating the likely affiliation of a client of a banking organization to the category of persons falling under the definition of Fatca Status. What are these criteria? Financial institutions pay attention to the birth of the owner of the account in the United States. It is worth noting that this serves as a good reason for obtaining citizenship of this country. Another feature is the presence of a telephone number, a place of residence or postal address in the United States, even in the form of a leased subscriber box. Suspicions may cause remittances carried out by the Client to accounts in US banks.
Check
Financial institutions collaborating with US tax authorities ask their customers to fill out a special Fatca's profile. What it is? This form contains questions that make it possible to identify persons falling under the law. The questionnaire that caused suspicion becomes the subject of further proceedings. In Russia, in the event of the inability of the client, it was documented to refute the assumptions about the presence of the status of the American taxpayer, the bank invites him to sign the official agreement on the report of personal data and information about the transactions of the US authorities. If the account owner refuses to do this, the financial organization has the right to stop servicing.
Methods of interaction
There are two options for cooperation of banks with American tax authorities as part of the implementation of the FATCA law. What is this scheme? The first model provides for the transfer of information by credit organizations to the government of its country. The state authorities are then share information with US fiscal services. The second model is built on the direct interaction of banks and the US tax authorities. Russian financial institutions participate in the implementation of an act on foreign assets in accordance with the first scheme and at the initial stage provide the necessary information from the Central Bank and Rosfinmonitoring, which make the final decision on the transfer of information to the US internal revenue service.
Methods for providing pressure
The American government had to apply some hard methods of impact on foreign banks in order to attract them to cooperate in the framework of the implementation of the FATCA law. What are these levers of influence? The law on foreign assets provides for serious fines and sanctions for refusing to enter into an agreement, up to restriction of access to the global reserve currency. The method of providing pressure includes a holding of 30% of the amounts of transactions of bank account owners that do not fulfill the requirements for the provision of information to the American tax authorities.
Admission to the budget
Expert assessments of the financial effectiveness of the Law on foreign assets differ greatly. According to calculations of the Committee on Taxation, the use of an act annually brings about 800 million dollars to the state budget. Evaluations of independent analysts are more pessimistic. In their opinion, the fulfillment of this law in voluntary and compulsory ensures admissions to the American budget in the amount of from 250 to $ 400 million per year. However, even the most optimistic numbers do not go into any comparison with multi-billion losses associated with evading tax payments by placing capital in foreign jurisdictions.
Criticism
According to a number of experts, the costs of financial institutions caused by compliance with FATCA requirements several times higher than the amount returned with the help of this law into the US state budget. The act of foreign accounts has reduced the number of taxation cases of approximately 1%.
The mechanism of coercion to the execution of the law, based on such punitive methods, as retention of money under transactions in the US banking system, leads to the reluctance of financial institutions to invest in US jurisdiction.
The concept of taxation is subjected to hard criticism, the main criterion of which is citizenship, and not permanent residence. From the point of view of the US authorities, American ex-patriots are automatically transformed into financial criminals. In accordance with statistical data, over the past few years, the number of cases of refusal of citizenship of this country has increased significantly.
The introduction of FATCA contradicted the laws of some states. For example, until 2014, Russian banks were not allowed to transfer information about their customers to foreign authorities. This ban was removed in order to protect financial institutions from fines and sanctions related to the new American law.