ARTICLE · 11 DECEMBER 2013

FATCA - An Overview

Arthur Cox

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The Foreign Account Tax Compliance Act (known as "FATCA") was signed into law on 18 March 2010.

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Dara Harrington

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Overview

The Foreign Account Tax Compliance Act (known as "FATCA") was signed into law on 18 March 2010.

The main purpose of FATCA is to ensure the US Inland Revenue Service ("IRS") can identify and collect tax from US citizens and residents holding financial assets outside the US.

Who is within scope?

FATCA will apply to all foreign financial institutions ("FFIs"). The definition of FFIs in the legislation is broad and includes investment funds, hedge funds, private equity funds, securitisation vehicles, custodians and banks.

FATCA will also apply to certain nonfinancial foreign entities ("NFFEs") which are foreign entities with one or more substantial US owners (a US person that owns more than 10% of the vote or value of the NFFE).

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