Introduction to FATCA

The US Treasury Department and IRS released nearly 400 pages of regulations that detail their plans to implement the Foreign Account Tax Compliance Act (FATCA), which became effective on 1 January 2013.

The proposed rules are intended to prevent US taxpayers who hold financial assets in non-US financial institutions and other offshore accounts from avoiding their tax payment obligations.

Under FATCA, certain US withholding agents, Foreign Financial Institutions (FFIs), and non-financial foreign entities are required to report information about offshore accounts and investments held by US taxpayers to the IRS annually.

These institutions include banks, insurance and real estate companies, hedge funds, mutual funds, and private equity firms. FFIs must enter into agreements with the IRS. If they fail to enter into such agreements to report US accounts, they will face a 30-percent withholding charge. 

FATCA timeline

31 December 2014
Preexisting individual account for high value clients must be documented by Participating FFIs

15 March 2015
Reporting 1042-S on withholdable income payments (US source FDAP income) begins with respect to the 2014 calendar year

31 March 2015
FFIs begin U.S. Account information and balance reporting (with respect to the 2013 and 2014 calendar years)

31 December 2015
All pre-existing account due diligence procedures to be completed for accounts which do not fall under the high value account requirements and for entity accounts which are not Prima Facie FFI

1 January 2016
Each FFI that is a member of an expanded affiliated group must be a participating FFI or deemed-compliant FFI in order for any FFI in the affiliate group to be participating

15 March 2016
PFFIs begin aggregate reporting on NPFFI payments for 2015

31 March 2016
Reporting on U.S. Account income by participating FFIs begins (with respect to the 2015 calendar year.)

1 January 2017
Withholding begins on gross proceeds payments and on passthru payments

15 March 2017
FFIs begin aggregate reporting on NPFFI payments for 2016

31 March 2017
FFIs reporting on prior year gross proceeds of identified US accounts

15 March 2018
PFFIs begin reporting on gross proceeds (1042-S)

Our FATCA services

We propose a full range of services to assist our client in the implementation of FATCA requirements. Depending on the scope of your activities project, FATCA projects need a full set of tasks that need to be performed.

Discover more on our services related to FATCA.

More information about FATCA regulation

We provide you more details about the FATCA regulation concerning:

  • Technical aspects of this regulation, like due diligence procedure, reporting requirements, withholding requirements, affiliated group requirement, and the “FATCA five”.
    Find it in our FATCA technical aspects pages.
  • Impact of FATCA on banks, investment funds, real estate, PSFs, private equity and hedge funds.
    Find it in our FATCA industries’ impact pages.
  • FAQs on FATCA challenges and issues, both for all financial institutions or by specific industry.
    Find it in our FATCA FAQs page.
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