Wednesday 20th November, 2019

What is FATCA?

The Foreign Account Tax Compliance Act is a piece of legislation that was enacted by the U.S. Government in 2010 and became effective on 1 January 2014. The purpose of FATCA is to ensure that all U.S. Persons are compliant with their tax reporting requirements. Under FATCA, US Persons and all entities, regardless of their country of incorporation or jurisdiction must be classified according to specified criteria contained in the regulations.

How does FATCA impact Bank of Nevis International Limited (BONI)?

FATCA obligates Foreign Financial Institutions (FFIs), such as BONI, to report to the Internal Revenue Service persons with US Indicia (US Persons) (or foreign entities in which U.S. Persons hold a substantial ownership interest) holding financial assets that exceed certain thresholds.

How does FATCA impact you-An Existing Customer?

BONI is required to review all existing accounts with a view to determining whether US Indicia apply. Contact will be established with such customers and should US Person status be confirmed, they will be required to complete a W-9 Form and provide their US Tax Information Number (TIN).

How does FATCA impact you-An Existing Customer should you refuse to provide requested information?

Failure to provide requested information within an acceptable timeframe would result in your being classified as “recalcitrant” (uncooperative) and subject to a 30% withholding tax on payments of interest, dividends, rents, salaries, or asset sales generated in the U.S.

How does FATCA impact you-A New Customer?

BONI’s account opening procedures and requirements have been changed to ensure that FATCA reporting considerations are addressed at the commencement of new relationships and a W-9 Form completed, where appropriate.

Where can I find fuller information on FATCA?

You may visit the following websites:

  • www.irs.gov/FATCA
  • www.irs.gov/Businesses/Corporations/Summary-of-FATCA-Reporting-for-U.S.-Taxpayers
  • www.irs.gov/Individuals/International-Taxpayers/Alien-Taxation-Certain-Essential-Concepts

Who can provide me with tax related advice?

U.S. tax law is highly complex and while BONI can provide general information on FATCA and local regulations, we are strictly prohibited from providing tax advice. If you are uncertain about your U.S. tax status, we recommend that you contact a professional tax advisor.

How does FATCA impact Customer Confidentiality?

Client confidentiality is of paramount importance to BONI and Nevis as an international financial centre. In complying with FATCA BONI will adhere to applicable privacy laws while maintaining high standards of customer privacy and customer service at all times.