FATCA: Are you ready for 1 January?
You’ve probably heard of the Foreign Account Tax Compliance Act (FATCA), but are you aware of how it could affect your company?
The US adopted FATCA in 2010 to make it harder for Americans to hide money in undeclared bank accounts. FATCA requires foreign financial institutions, or FFIs, to report account information about their American customers to the Internal Revenue Service and in some cases, to withhold taxes from payments to them. If they fail to do so, FFIs will suffer a 30% withholding tax on all relevant US-sourced payments, such as dividends and interest paid by US corporations.
Even if you think that your entities could never be FFIs, FATCA also applies to entities that are withholding agents — both inside and outside the US. Everyone needs to check and be sure of their status. Watch our short animation or listen to a more detailed podcast to be informed:
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