ARTICLE · 05 AUGUST 2014

FATCA compliance now mandatory for certain AFSL holders

Holley Nethercote

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If your organisation meets the definition of an Australian Financial Institution, then FATCA could apply to you.

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As originally announced, the application of FATCA to Australian AFSL holders was optional, with no apparent downside to non-compliance, other than the fact that US-source income may be withheld. However, following Australia entering into the IGA with the United States, FATCA compliance has become mandatory for certain AFSL holders.

The key question is of course, does FATCA apply to me?

Background

FATCA is the Foreign Account Tax Compliance Act, enacted by US Congress in 2010. The purpose of the Act is to improve compliance with US tax laws, particularly in relation to schemes where US reportable income is moved offshore, to and through foreign financial institutions, without being reported to the IRS.

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