The Dominica government has entered into an Intergovernmental Agreement (“IGA”) with the United States Of America To Improve International Tax Compliance And To Implement the Foreign Account Tax Compliance Act (“FATCA”)”. As a result, Dominica financial institutions, such as Paxum Bank Limited are required to take several actions in order to ensure FATCA compliance.
FATCA obligations require Dominica financial institutions to identify financial accounts held by U.S. residents or U.S. citizens, or by entities that are organized in the US or controlled by one or more U.S. persons, as defined in the IGA, and to report those accounts to the Inland Revenue Department of the Government of Dominica which will forward this information to the Internal Revenue Service (“IRS”) of the United States.
Paxum Bank Limited is committed to comply with all FATCA provisions at all times and as a Foreign Financial Institution (“FFI”) under FATCA, has registered with the IRS and has been assigned the following Global Intermediary Identification Number (GIIN): A3NTZ5.99999.SL.212
STATUTORY DISCLOSURES FOR U.S. PERSONS (FATCA)
Reporting obligations for U.S. persons Residents of the U.S. as well as persons with substantial economic ties with the U.S. should be aware of a new chapter of IRS Code (Chapter 4) also known as FATCA, which aims to address tax abuses by U.S. persons through usage of foreign accounts. The new rules oblige foreign financial institutions – institutions domiciled and administered outside of the USA to report IRS on U.S. persons investing in accounts outside of U.S.
WHO ARE U.S. PERSONS?
Notice 2011-34 lists six indicia of U.S. status:
- U.S. citizenship or lawful permanent resident (green card) status;
- A U.S. birthplace;
- A U.S. residence address or a U.S. correspondence address (including a U.S. P.O. box);
- Standing instructions to transfer funds to an account maintained in the United States, or directions regularly received from a U.S. address;
- An “in care of” address or a “hold mail” address that is the sole address with respect to the client; or
- A power of attorney or signatory authority granted to a person with a U.S. address
SCOPE OF FATCA
Due to character of FATCA, it is going to impact all financial and non-financial operating companies receiving any U.S. source income, including dividends, royalties, interest etc. It is worth to mention that virtually all international financial centers signed FATCA into local laws or regulations. According to the latest reports U.S. Treasury has not indicated that any countries will have a special exception from reporting requirements. Pursuant to FATCA all financial institutions which keep U.S. person’s accounts are obliged to obtain some of the documents below (subject to US indicia type):
- W-9 or W-8BEN forms
- Non-U.S. passport or similar documentation establishing foreign citizenship (in case of U.S. birth)
- Written explanation regarding U.S. citizenship (in case of U.S. birth)
- Document establishing non-US status