Ken Wrigley, director of Trust Corporation, examines the
impact of the America's FATCA regulations for
trustees.
U.S. legislators love an acronym so it is a little surprising
that the Foreign Account Tax Compliance Act (FATCA) regulations
were introduced under the HIRE Act (Helping Individuals Return to
Employment) when clearly there are more punchy labels
available.
FATCA was passed in the U.S. in 2010 and following a degree of
industry consultation the proposed regulations were released in
early 2012 with an invitation for feedback. The final regulations
are expected in late 2012 as are finalised forms (W8-Ben, W8-BenE,
etc). The fundamental purpose of the FATCA regulations is to
encourage foreign financial institutions (FFI) doing business with
U.S. persons to inform the IRS, directly or otherwise, that this is
the case. To encourage enforcement there are punitive withholding
tax and penalty provisions imposed on recalcitrant (uncooperative)
persons or entities.
