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ARTICLE · 18 FEBRUARY 2016

Getting Up To Date On FATCA - A Recap And Update

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FATCA refers to US legislation more fully known as the Foreign Account Tax Compliance Act and includes the US Treasury regulations implementing it.

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Tim Dawson
Tim Dawson
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What is FATCA?

FATCA refers to US legislation more fully known as the Foreign Account Tax Compliance Act and includes the US Treasury regulations implementing it. It was enacted as part of the Hiring Incentives to Restore Employment Act of 2010 (otherwise known as the, "HIRE Act") on 18 March 2010.

The goal of FATCA is to enable the IRS to identify US persons (generally US citizens or residents) seeking to evade US taxation by holding assets in foreign (i.e. non- US) accounts, whether in their own name or via non-US structures such as trusts or funds. FATCA requires information about US persons and their foreign accounts to be reported directly or indirectly to the IRS.

Non-compliance with FATCA may lead to a US withholding tax of 30% on US source income, including the gross sales proceeds of certain U.S. assets.

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