Grete Chan, 25 June 2013
FATCA has been on the lips of every US domiciled and related foreign financial institutions (“FFI”) and individuals alike, as institutions are expected to have drawn a special agreement with the IRS by June 30, before handing over to the IRS information about financial accounts held by U.S. taxpayers, or held by foreign entities in which U.S. taxpayers hold a substantial ownership interest. Individuals who hold financial assets over US$50,000 are also affected, and must duly report all their interest and income accrued.
If those FFI do not provide the IRS with their accounts whether it be a US domiciled account or that their substantial shareholder is a US Person, then payment agents are forced to withhold tax on certain payments to these FFIs.
To help you through the myriad of terminology, Alacra Compliance Solutions cleverly devised a periodic table of your FATCA acronyms, which will be useful to waddling through what you need to do to become FATCA compliant. Or perhaps you may consider renouncing your US citizenship like many.
While the intentions of IRS is to bring in ‘FAT Cat’ tax evaders, they did not expect that it would affect thousands of unsuspecting expatriated US persons to resort to losing American nationality in order to burrow out of the legal nightmare. It calls in question its effectiveness on honing in the real FAT Cats… or who is the real FAT Cat in the first place?