February 27, 2014
Implementation of the Foreign Account Tax Compliance Act (FATCA) is scheduled to begin on July 1, 2014. FATCA is a law enacted by the United States government to identify U.S. taxpayers who have moved assets offshore to avoid being legitimately taxed on their U.S. and foreign source income. The FATCA legislation creates a comprehensive tax information reporting system, coupled with new tax withholding requirements, to ensure compliance.
Starting July 1, 2014, financial institutions need to comply with FATCA and its new regulations. Firms should consult with legal and tax advisors for the impact FATCA and its regulations may have on the firm or its clients.
Final versions of Form W-8BEN and Form W-8ECI, which should be used to document an account for tax purposes under FATCA, are available on the IRS Forms and Publications website. The Internal Revenue Service’s FATCA website contains links to the final FATCA regulations, new tax forms and instructions, and the registration portal, among other helpful items.