FATCA is a Russified abbreviation from English that stands for the United States Federal Tax Compliance Act (FATCA - Foreign Account Tax Compliance Act). This law is also called the “Foreign Account Tax Law.” In accordance with this law, foreign financial institutions (registered outside the United States) must inform the United States Internal Revenue Service (IRS - International Revenue Services) about so-called "US clients"
including those who live outside the United States.

1. What is the purpose of FATCA?

FATCA was adopted to prevent tax evasion by US taxpayers who hold accounts with non-US financial institutions or offshore investment vehicles.

FATCA requires financial institutions located outside the United States to identify their customers based on certain criteria, collectively known as “United States characteristics,” and to report such customers to the IRS in accordance with government-to-government treaties. USA and other countries.

1. When do the provisions of FATCA apply?

CB "COMERZBANK" JSC informs the US Tax Service directly (not through the Ministry of Finance of the Republic of Moldova), in accordance with the Intergovernmental Agreement of the 2nd type, signed by the governments of the Republic of Moldova and the USA on November 26, 2014.

According to the Intergovernmental Agreement, CB "COMERTSBANK" JSC registered on the IRS portal and received the GIIN (Global Intermediary Identification Number) code: VY0Z9.99999.SL.498, having fulfilled the requirements of FATKA.

1. Who is affected by FATCA?

The provisions of FATCA affect individuals and legal entities, clients of financial institutions of the Republic of Moldova, who have tax obligations to the United States and receive taxable income outside the United States, namely:

1. American citizens and American tax residents;
2. citizens without U.S. citizenship but who have been in the United States for at least 183 days, which is calculated as follows: all days during which you were in the country during the current year (at least 31 days), and 1/3 of the number of days during which you were in the country during the year immediately preceding the current year and 1/6 of the number of days during which you were in the country during the second year preceding the current year;
3. US legal entities;
4. foreign non-financial entities (non-SUA) whose substantial owners (with at least a 10% ownership interest) are US citizens and tax residents.

The following are not US residents for tax purposes: teachers, students, interns who are temporarily in the US on the basis of visas of the following categories: F, J, M şi Q.

1. What does FATKA status mean?

“FATCA” status is a status assigned by the Bank to those of its clients, individuals and legal entities who meet the FATCA criteria, and to whom the Bank must apply the procedures provided for by FATCA.

1. How will FATKA affect customers?

All clients of CB COMERTSBANK JSC will be subject to an identification procedure to determine whether they are US account holders. US account holders will be assigned FATCA status as a result of their US characteristics and will be required to provide information requested by the Bank.

1. What are the consequences for clients who refuse to provide the Bank with the information necessary to establish FATCA status?

Clients who do not provide information on the basis of which the Bank can decide to assign them FATCA status will be classified as US account holders - refusers and information about them will be provided to the US Internal Revenue Service.

1. What is meant by a “refusing client”?

A “custodial client” means a bank account owner, an individual or legal entity who:

1. did not respond to the Bank's request to provide documents necessary to assign FATCA status or information required to submit to the US Internal Revenue Service (valid W-9 form, correct US taxpayer name and number, etc.);
2. did not consent to the Bank providing his personal data to the US Tax Service.

1. What is a US Taxpayer Identification Number (US TIN)?

A US Taxpayer Identification Number (US TIN) is a number that identifies an American taxpayer used by the United States Internal Revenue Service in administering taxes.

The US taxpayer number can be:

1. SSN(Social Security Number) - social security number of a US citizen;
2. ITIN(Individual Taxpayer Identification Number) - US taxpayer identification number;
3. ATIN(Adoption Taxpayer Identification Number) - US taxpayer identification number for children adopted in the USA.

1. What are Forms W-9, W-8BEN, and W-8BEN-E?

The Bank uses the information provided by clients on forms W-9, W-8BEN and W-8BEN-E to decide whether to assign them FATKA status. Clients independently fill out and submit these forms to the Bank. Otherwise, clients will be considered “refusal clients”, which will entail the Bank’s actions described above.

To complete these forms, clients must use the instructions for completing them, which are published on the US Internal Revenue Service website (https://www.irs.gov):

Form W-9 is completed by both individuals and legal entities and represents the account owner’s confirmation of his status as a person related to the United States.

Form W-8BEN is completed only by individuals and represents the account owner’s confirmation of his non-US status.

Form W-8BEN-E is filled out only by legal entities and represents the account owner’s confirmation of his status as a person not related to the United States.

1. I am a client of CB "COMERTSBANK" JSC. The bank informed me that I have US characteristics. Am I obliged to provide the Bank with the documents requested by it?

You are advised to provide the Bank with the requested documents. If you do not provide the Bank with the appropriate completed form, you will be considered a “refusal customer” for FATCA purposes, and the Bank will be forced to report your account information to the IRS, even if it is not authorized.

There was a serious stir in the banking environment after the entry into force of the American law known as FATCA. What does this mean and how does this abbreviation stand for? The Foreign Account Tax Compliance Act is a federal law designed to force American citizens, including those living outside the United States, to file annual returns regarding their foreign financial assets.

The international cooperation

The practical application of this provision requires assistance from banking institutions in all countries of the world. Passed in 2010, the law obliges foreign financial institutions to verify the presence of US citizenship of their clients. It is important to note that not only having a US passport means you have to pay taxes in that country. The fact of birth in the United States and certain other conditions may result in the designation of a person reporting to the Internal Revenue Service and subject to the FATCA law. What kind of organization is this? The Internal Revenue Service is the primary federal agency responsible for collecting taxes and enforcing financial laws.

Tasks

According to unofficial information, American citizens permanently living in other countries were not the main targets of FATCA. The main task was to identify the foreign assets of US residents who do not think about emigrating, but prefer to keep their money outside their homeland. According to the calculations of the creators of the FATCA law, the return of such taxpayers to the attention of fiscal authorities should have significantly increased revenues to the state budget. By some estimates, the new rules affect about 9 million people. FATCA even requires non-US companies and corporations to do so if they include American citizens.

Analogies

It is almost impossible to find another state in the world that applies such draconian tax measures. Eritrea has a similar policy towards its citizens permanently living abroad. But this African country offers ex-patriots a voluntary tax payment procedure. The uniqueness of FATCA requirements is that they apply not only to citizens. This law covers persons identified by the unusual wording of "persons having tax obligations to the United States."

According to unconfirmed reports, losses to the state budget caused by citizens hiding their foreign assets amount to approximately $100 billion a year. However, it is not possible to reliably determine the amount of undeclared income.

Bank participation

The American FATCA law is implemented in practice in two main ways. It requires foreign financial institutions to enter into an agreement with the Internal Revenue Service. In accordance with this agreement, banks assume the responsibility of identifying clients in their databases who are classified as US taxpayers. Financial institutions must disclose information about account holders that qualify for FATCA status. What does this mean? The names, addresses and transactions of persons suspected by banks of having U.S. tax liabilities are made known to the Internal Revenue Service. Information on some types of accounts is not disclosed. This mainly concerns pension savings, which are subject to tax benefits.

Individual Disclosure

US citizens with foreign financial assets must independently report them to the Internal Revenue Service by filling out a special form. FATCA provides for a fine of 40% of the amount of funds held in a foreign account if information about its existence is concealed from US authorities. Foreign assets may be cross-checked by financial institutions that have an agreement with the Internal Revenue Service.

Identification

There is a list of standard signs indicating that a client of a banking organization likely belongs to the category of persons falling under the definition of FATCA status. What are these criteria? Financial institutions pay attention to the fact that the account holder was born in the United States. It is worth noting that this serves as a valid reason for obtaining citizenship of this country. Another sign is the presence of a telephone number, residence, or mailing address in the United States, even in the form of a rented PO Box. Money transfers made by clients to accounts in American banks may cause suspicion.

Examination

Financial institutions that cooperate with US tax authorities ask their clients to fill out a special FATCA questionnaire. What it is? This form contains questions to help identify individuals covered by the law. A questionnaire that arouses suspicion becomes the subject of further investigation. In Russia, if a client is unable to document the assumption of American taxpayer status, the bank invites him to sign an official consent to disclose personal data and transaction information to US authorities. If the account owner refuses to do so, the financial institution has the right to terminate service.

Ways of interaction

There are two options for banks to cooperate with American tax authorities as part of the implementation of the FATCA law. What are these schemes? The first model involves credit institutions transferring information to the government of their country. Government authorities then share the information with US fiscal authorities. The second model is based on direct interaction between banks and American tax authorities. Russian financial institutions participate in the practical implementation of the act on foreign assets in accordance with the first scheme and at the initial stage supply the necessary information to the Central Bank and Rosfinmonitoring, which make the final decision on the transfer of information to the US Internal Revenue Service.

Methods of applying pressure

The American government had to use some tough methods of influencing foreign banks in order to attract them to cooperate in the implementation of the FATCA law. What kind of leverage are these? The Overseas Assets Act provides for serious fines and sanctions for refusal to enter into an agreement, including restricting access to the world reserve currency. Methods of exerting pressure include withholding 30% of the transaction amounts of bank account holders who do not comply with requirements to provide information to US tax authorities.

Budget revenues

Expert assessments of the financial effectiveness of the law on foreign assets vary widely. According to estimates by the Congressional Committee on Taxation, the use of the act annually brings about $800 million to the state budget. Independent analysts' estimates are more pessimistic. In their opinion, the implementation of this law, voluntarily and compulsorily, provides revenue to the American budget in the amount of from 250 to 400 million dollars a year. However, even the most optimistic figures cannot be compared with the multi-billion dollar losses associated with tax evasion by placing capital in foreign jurisdictions.

Criticism

According to a number of experts, the costs of financial institutions caused by compliance with FATCA requirements are several times higher than the amount returned to the US government budget through this law. The Foreign Accounts Act reduced tax avoidance by about 1%.

The enforcement mechanism, based on punitive methods such as withholding funds from transactions in the American banking system, leads to the reluctance of financial institutions to invest in US jurisdictions.

The concept of taxation, the main criterion of which is citizenship rather than permanent residence, has been severely criticized. From the point of view of the US authorities, American ex-patriots automatically turn into financial criminals. According to statistics, over the past few years the number of cases of renunciation of citizenship of this country has increased significantly.

The implementation of FATCA was contrary to the laws of some states. For example, until 2014, Russian banks were not allowed to transfer information about their clients to foreign authorities. This ban was lifted to protect financial institutions from fines and penalties associated with the new American law.

One of the main principles of Bank Vozrozhdenie is compliance with all requirements of the legislation of the Russian Federation, as well as requirements and laws that have extraterritorial effect and affect the activities of financial institutions of the Russian Federation.

On July 1, 2014, the requirements of the law of the United States of America “On the implementation of tax requirements on foreign accounts” Foreign Account Tax Compliance Act (hereinafter referred to as FATCA) came into force in relation to individuals; from January 1, 2015, FATCA requirements came into force in relation to legal entities. persons Vozrozhdenie Bank has registered with the US Internal Revenue Service (IRS) as a financial institution that has joined the FATCA requirements and is obligated to comply with these requirements (Participating FFI).

Bank Vozrozhdenie has been assigned the identification number GIIN (Global Intermediary Identification Number): XHF4KB.00000.LE.643

The bank has appointed a person responsible for compliance with the requirements of the FATCA law, approved the Rules for the identification of US taxpayers among clients of individuals, individual entrepreneurs and individuals engaged in private practice and the Rules for the identification of clients of legal entities subject to the US Foreign Account Tax Compliance Act (FATCA - Foreign Account Tax Compliance Act) and updating information about them for the purpose of implementing the requirements of the Law (hereinafter referred to as the Rules).

The criteria for classifying a client - a foreign taxpayer - an individual, an individual entrepreneur and a person engaged in private practice are defined in Appendix No. 2 (PDF, 102.9 KB) to the relevant Rules.

The criteria for classifying a client - a foreign taxpayer - a legal entity are defined in Appendix No. 2 (PDF, 157.8 KB) to the relevant Rules.

Note!

from the client - a foreign taxpayer, the necessary information is provided by filling out the Client Self-Certification Form for FATCA purposes.

Questionnaire for a tax resident - individual/individual entrepreneur for FATCA purposes (PDF, 226.9 KB)

Instruction for the client - FL according to FATCA (PDF, 288.6 KB)

Questionnaire for a tax resident - a legal entity that is not a credit organization for FATCA purposes (PDF, 454 KB)

Memo for the client - legal entities according to FATCA (PDF, 297.9 KB)

FAQ

What is FATCA?

FATCA - (Foreign Accounts Tax Compliance Act) Law "On the implementation of tax requirements on foreign accounts", which is part of a package of economic measures aimed at maintaining employment in the United States - Hiring Incentives to Restore Employment (HIRE) Act of 2010.

The main purpose of FATCA is to prevent US tax residents from paying taxes to the US treasury.

In this regard, FATCA establishes a number of requirements for foreign financial institutions to disclose information and identify US taxpayers, which are aimed at identifying individuals who evade US taxation by hiding their assets from US tax authorities.

Detailed information about FATCA can be found on the official website of the US Internal Revenue Service at http://www.irs.gov.

What are the responsibilities of financial institutions under FATCA?

In order to comply with FATCA requirements, financial organizations carry out procedures for identifying US tax residents among their Clients.

On an annual basis, financial institutions are required to report information about financial accounts held by US tax residents.

When does FATCA come into effect?

Procedures for identifying individuals, individual entrepreneurs and persons engaged in private practice for the purposes of FATCA came into force on July 1, 2014.

The most important!

How will FATCA affect non-US tax residents?

In order to identify a client who is not a US tax resident, he must check the appropriate box in the Questionnaire or Agreement. If necessary, a Bank employee can issue the client a Self-Certification Form for FATCA purposes, which must be filled out, noting that he is not a US tax resident.

What documents must be submitted by a US tax resident?

In order to identify US tax residents, clients must check the appropriate box in the Questionnaire or Agreement. Individuals indicating that they are US tax residents will be asked to complete a FATCA Self-Certification Form, which requires US tax residents to provide a Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN).

In addition, US tax residents must consent to the submission of their personal data and information about accounts, balances and turnover to the US Tax Authority. Consent to transfer information to the US Tax Authority in accordance with Federal Law dated June 28.

2014 No. 173-FZ is a simultaneous consent to the transfer of such information to the Central Bank of the Russian Federation, the federal executive body authorized to carry out the function of combating the legalization (laundering) of proceeds from crime and the financing of terrorism and the federal executive body authorized to control and supervision in the field of taxes and fees.

What are the consequences of a US taxpayer's refusal to provide information about his tax residence and refusal to consent to the submission of data to the US Tax Authorities?

• in case of failure by the client entering into the contract, in respect of whom the credit institution has a reasonable, documented assumption that the client belongs to the category of clients - foreign taxpayers, information necessary for his identification as a client - foreign taxpayer, and (or) in case of failure to provide by a client who is a foreign taxpayer, within fifteen working days from the date of sending the credit organization’s request for consent (refusal to provide consent) to transfer information to a foreign tax authority, the credit organization has the right to refuse the client to conclude a bank account (deposit) agreement or other agreement providing for the provision of financial services .
• in the event that the client - a foreign taxpayer fails to provide, within fifteen working days after the day the decision is made to refuse to carry out transactions, the information necessary to identify him as a client - a foreign taxpayer, and (or) in the event that the client - a foreign taxpayer does not provide consent (refusal to provide consent) to transfer information to a foreign tax authority, a credit organization has the right to terminate a bank account (deposit) agreement concluded with it or another agreement providing for the provision of financial services by notifying the client - a foreign taxpayer - no earlier than thirty working days before the date of termination of the relevant agreement .
• in the case of receipt of funds to a bank account (deposit) opened for a client - a foreign taxpayer, after the credit institution makes a decision to refuse to carry out transactions, the credit organization returns payments received in favor of the client - a foreign taxpayer, to the payers' accounts in the sending banks.

What are the features of identifying legal entities under FATCA?

Procedures for identifying legal entities for FATCA purposes come into force on January 1, 2015.
For the purposes of this, you are required to submit to the Bank a completed Self-Certification Form in the following cases:

1. Your organization is a Financial Institution;
2. Your organization is registered/established in the United States or controlled territories under US law;
3. The controlling persons of your company who directly or indirectly own more than 10% of the company's share include an individual who is a US tax resident or a legal entity registered/incorporated in the US.

Source: http://www.vbank.ru/about/fatca/

FATCA Forms. How and why to fill out

When opening a bank account in a foreign or large Russian bank, many today are faced with the need to fill out a FATCA form. But what is it and why should we fill it out?

In accordance with the American Foreign Account Tax Compliance Act of 2010, which came into force on July 1, 2014, American citizens are required to report the presence of foreign accounts they have abroad and provide information on them. .

In addition, the obligation to report to the Internal Revenue Service (IRS) about the presence of accounts of American taxpayers arises for all foreign (non-American) financial institutions (primarily banks, as well as depositories, insurance companies, etc.

financial institutions, which I will write about in more detail later).

Helpful advice!

Thus, the States organized full control over the activities and income arising from these activities of their citizens (please note that America is the only country in which all citizens, without exception, are tax residents of the country by citizenship, regardless of place of residence).

For other states, the obligation to provide information on the accounts of American citizens arises on the basis of intergovernmental FATCA agreements, which have been concluded (or are in the process of approval) by almost all European, and not only European, countries. There are two models of such an agreement:

• Model 1 IGA - the country's financial institutions report on American clients to local tax authorities, and they, in turn, automatically transmit information to the US federal tax service.
• Model 2 IGA - the country's financial institutions report American clients directly to the IRS.

In case of failure to provide information, sanctions are applied, which will be discussed below. Moreover, if a particular bank has not complied with FATCA requirements, then sanctions will be applied specifically to its clients, and if an entire country has not signed FATCA, then this tax withholding measure will be applied to all clients of banks in that country.

To date, Russia has not signed the FATCA intergovernmental agreement. And due to the international situation and the sanctions imposed against Russia, signing is not expected in the near future.

Accordingly, Russian banks (and other financial institutions) are not required to report information on American clients. But not everything is as good as we would like. Because as a result, when making payments with American banks, sanctions may be applied to clients of Russian banks.

To avoid this, many Russian financial institutions (90%) have privately acceded to FATCA requirements (by registering with the federal tax service and obtaining a Global Intermediate Identification Number (GIIN)) and collecting the necessary information from their clients.

I will write about the relationship between the actions of these banking structures and domestic Russian and international legislation in a separate article.

Let us dwell in a little more detail on the application of sanctions to non-FATCA participants (the so-called dishonest account holders). Withholding agents in the States collect a 30% withholding tax on specified US taxable payments made to non-FATCA parties, and such payments include:

• Payments from US sources for interest, dividends, bonuses, annuities, etc., as well as other regular payments (FDAP) from US sources, starting July 1, 2014 (because all willing financial institutions had to register on IRC before July 1, 2014).
• Gross proceeds from the sale or disposition of property on which interest or dividends may accrue from sources within the United States beginning on January 1, 2017.
• Starting in 2017, 30% tax payments will also be levied on specific foreign pass-through payments. Tax agents will submit reports of relevant deductions to the Federal Tax Service.

So, if when opening an account the bank asks you to fill out a FATCA form, then do not be surprised or alarmed. Moreover, if you are not a US taxpayer, you can safely fill it out.

If you do not represent a company that is a financial institution and does not work in the interests of American beneficiaries, then information about you will never be received by the federal tax service.

Therefore, it is better to fill out the form, otherwise the bank may refuse to open an account or conduct transactions.

Note!

In order to identify you, the bank asks you to indicate in the questionnaire the type of company you belong to (applicable to legal entities). The main types are: financial company and non-financial company. If a non-financial company, then an active or passive non-financial company.

Determining your affiliation is necessary to understand the amount of information that needs to be obtained from you. If you are a passive non-financial company (such as a holding company), then you must provide information about the beneficiaries of your business to confirm that there are no US residents.

If you are an active non-financial company, then the amount of information you provide is minimal (in fact, you are limited to checking one box on the form).

There should be no difficulties in determining the type of company to which your organization belongs, because a dictionary with detailed definitions is attached to the form. In short:

Financial companies are banking, depository, investment, specialized insurance organizations, as well as holding companies that are included in the same group as the organizations listed above.

Non-financial companies - all others that are not financial, in particular various non-profit organizations (public, administrative, charitable, cultural, etc.).

Active non-financial companies are companies that meet one of the following criteria:

• Less than 50% is passive income or assets that provide passive income;
• Securities are quoted in organized trading;
• Founded in the States and its shareholders are American;
• The government of any country and its divisions;
• Holding companies financing subsidiaries that conduct active business and do not engage in financial activities as defined in the definitions above;
• Companies carrying out financial activities in the interests of affiliates that are not financial companies;
• Companies that have stopped conducting financial activities for five years.

Passive non-financial companies are all companies that do not meet the above criteria. And accordingly, more than 50% is profit in the form of passive income (interest, dividends, royalties, rental payments, etc.).

Thus, if you see that your company is a financial institution, then you have an obligation to join FATCA and report on your American clients. If your company is a passive non-financial company, then you need to inform the bank about your beneficiaries.

If you are an active non-financial company, then the minimum requirements for you are just to confirm your status in the form. Feel free to fill it out. If suddenly you made a slight mistake or your company changed its status, then there’s nothing wrong with that, the bank will notify you about it as errors are identified.

There are no sanctions for this.

Source: https://zakon.ru/Blogs/formy_fatca_kak_i_zachem_zapolnyat/41513

Compliance with FATCA requirements

In accordance with the requirements of the law of the United States of America “On the implementation of tax requirements on foreign accounts” Foreign Account Tax Compliance Act (hereinafter referred to as FATCA) in relation to individuals and legal entities and the Federal Law of June 28.

2014 No. 173-FZ “On the specifics of carrying out financial transactions with foreign citizens and legal entities, on introducing amendments to the Code of the Russian Federation on Administrative Offenses and invalidating certain provisions of legislative acts of the Russian Federation”, the bank is obliged to identify foreign taxpayers among its clients.

Energotransbank is registered on the portal of the US Internal Revenue Service (IRS) in order to comply with the requirements of the US Foreign Account Tax Compliance Act (FATCA) as a participating foreign financial institution.
The bank has been assigned a FATCA identifier (Global Intermediary Identification Number, GIIN) GAEQE9.99999.SL.643
FATCA - (Foreign Accounts Tax Compliance Act) Law "On the implementation of tax requirements on foreign accounts", which is part of a package of economic measures aimed at maintaining employment of the US population - Hiring Incentives to Restore Employment (HIRE) Act of 2010. The main goal FATCA is designed to prevent US tax residents from paying taxes to the US Treasury. In this regard, FATCA establishes a number of requirements for foreign financial institutions to disclose information and identify US taxpayers, which are aimed at identifying individuals who evade US taxation by hiding their assets from US tax authorities.

Detailed information about FATCA can be found on the official website of the US Internal Revenue Service at www.irs.gov.

In order to identify a client who is not a US tax resident, he must check the appropriate box in the Questionnaire or Agreement. If necessary, a Bank employee can issue the client a Questionnaire for FATCA purposes, which must be filled out, noting that he is not a US tax resident.

The most important!

FATCA does not provide any obligation for financial institutions to report to the IRS about persons who are not US tax residents. Thus, if the client is not a US tax resident, FATCA does not affect him.

In order to identify US tax residents, clients must check the appropriate box in the Questionnaire. Individuals indicating that they are US tax residents will be asked to complete a FATCA Self-Certification Form, which requires US tax residents to provide a Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN). In addition, US tax residents must agree to submit their personal data and information about accounts, balances and turnover to the US Tax Authority and the authorized bodies of the Russian Federation (Bank of Russia, Rosfinmonitoring, Federal Tax Service).

The bank has the right to request additional documents from clients, which must be submitted within 15 business days from the date of sending the request.

In accordance with Article 4 of the Federal Law of June 28, 2014 No. 173-FZ “On the specifics of carrying out financial transactions with foreign citizens and legal entities, on introducing amendments to the Code of the Russian Federation on Administrative Offenses and invalidating certain provisions of legislative acts of the Russian Federation”:

- in the event that the client entering into the contract, in respect of whom the credit institution has a reasonable, documented assumption that the client belongs to the category of clients - foreign taxpayers, fails to provide information necessary for his identification as a client - a foreign taxpayer, and (or) in the event If the client - a foreign taxpayer - fails to provide consent (refusal to provide consent) to transfer information to a foreign tax authority within fifteen working days from the date of sending the credit organization's request, the credit organization has the right to refuse the client to conclude a bank account (deposit) agreement or other agreement providing for the provision of financial services;

- in the event that the client - a foreign taxpayer fails to provide, within fifteen working days after the date of the decision to refuse to carry out transactions, the information necessary to identify him as a client - a foreign taxpayer, and (or) in the event that the client - a foreign taxpayer does not provide consent (refusal granting consent) to transfer information to a foreign tax authority, a credit organization has the right to terminate a bank account (deposit) agreement concluded with it or another agreement providing for the provision of financial services by notifying the client - a foreign taxpayer - no earlier than thirty working days before the date of termination of the corresponding contracts;

- in case of receipt of funds to a bank account (deposit) opened for a client - a foreign taxpayer, after the credit institution makes a decision to refuse to carry out transactions, the credit organization returns payments received in favor of the client - a foreign taxpayer, to the payers' accounts in the sending banks .

Procedures for identifying legal entities for FATCA purposes came into force on January 1, 2015.
For identification purposes, the Client must submit to the Bank a completed Self-Certification Form in the following cases:

- the organization is a Financial Institution;

- the organization is registered/established in the United States or controlled territories under US law;

- the controlling persons of your company, who directly or indirectly own more than 10% of the share in the company, include an individual who is a US tax resident or a legal entity registered/incorporated in the US.

Source: http://www.energotransbank.com/about/requirements-fatca/

Sberbank notifies about registration for FATCA purposes

June 30, 2014, Moscow – In connection with the entry into force of the US Foreign Account Tax Compliance Act (FATCA) on July 1, 2014, Sberbank of Russia has registered with the US Internal Revenue Service (IRS) as a financial institution that complies with the requirements of FATCA (Participating financial institution not covered by an IGA). Individual identification number: JPCJ0H.00028.ME.643.

FATCA aims to collect information about American taxpayers.

We hereby inform clients - individuals, as well as individual entrepreneurs and individuals engaged in private practice in accordance with the procedure established by the legislation of the Russian Federation (lawyers, notaries, etc.), interested in concluding agreements with Sberbank of Russia (hereinafter referred to as the Bank), about the possibility of disclosing information about your US taxpayer status for FATCA purposes.

If at the time of your application to the Bank after July 1, 2014 to conclude an agreement for any service, you do not have valid accounts with the Bank, you can fill out the Bank’s questionnaire containing additional FATCA information (hereinafter referred to as the Questionnaire). The form of the Questionnaire and the procedure for filling it out are presented on the Bank’s website in the relevant sections of products and services, as well as in information folders in service offices.

As part of filling out the Questionnaire, you will be required to provide the following additional documents, depending on your answers to the questions in the Questionnaire:

If you are a US citizen or US tax resident, you must provide a completed Form W-9 (Form W-9 is available on the US Internal Revenue Service website: http://www.irs.gov/pub/irs-pdf/fw9.pdf ). Consult your tax advisor about how to complete the form.

Today we are witnessing the creation global system of interstate cooperation In matters of taxation, more and more states are adopting domestic laws and entering into intergovernmental agreements aimed at collecting taxes from foreign accounts and contributions of their taxpayers. The United States was a pioneer on this path; now such processes are happening all over the world.

The excitement in the banking environment around the world arose in connection with the entry into force on July 1, 2014 of the provisions on the taxation of foreign accounts (English: Foreing Account Tax Compliance Act, hereinafter referred to as FATCA). This subsection is included in the US law on incentives to restore employment of March 18, 2010 (eng. The Hiring Incentives to Restore Employment Act), but over time FATCA has acquired its own exclusive meaning.

This subsection was adopted with the aim of returning to the US budget all lost taxes from U.S. taxpayers' foreign income held in their non-U.S. bank accounts.

Taking into account double taxation agreements, FATCA includes persons obliged to disclose information on the presence of foreign assets: not only US citizens, regardless of the presence of a second citizenship, but also individuals born in the United States and who do not have American citizenship, and even persons who do not have American citizenship, if at least one of the parents of such a person lived in the United States for more than five years after this parent reached age 14 years. Permanent residents of the United States are also required to disclose information about foreign accounts, namely persons who have a green card or have stayed in the United States for more than 31 days in the current year and more than 183 days in total over the past three years. Exceptions include officials, teachers and coaches, students, athletes who came to the United States to participate in charitable competitions, as well as persons who were able to demonstrate the maintenance of a close financial connection with another state. The presence of such a close connection can be confirmed by paying taxes in another country, having a permanent residence, family, main assets or business in general in another state. Legal entities will also be required to pay taxes on foreign assets. This category includes US organizations with limited exceptions (except banks, US tax-exempt organizations, including charities and some pension funds, etc.), and foreign legal entities if 10% or more of their authorized capital, shares or income belongs directly or indirectly to a US citizen, permanent resident or US entity.

FATCA requires from Russian financial organizations to identify the above-mentioned persons and transfer the received information to the US Tax Service (Internal Revenue Service, hereinafter referred to as the IRS). There are several options for banks to behave when fulfilling the requirement to transfer information. According to the first option, a foreign bank, in addition to transmitting information about the availability of accounts of an American taxpayer, takes on part of the functions of the fiscal authority and independently withholds tax in the amount of 30% of the income of the American taxpayer and redirects these funds to the IRS. The second option involves transferring this function to a US tax agent specifically authorized by the IRS to do so.

To transfer information to the US Tax Service, Russian financial organizations (in particular banks) had to enter into an agreement with the IRS before May 5, 2014 and go through the registration procedure on its website. If a financial organization has not yet registered with the IRS or refuses in principle to transfer information about an American taxpayer, then from July 1, 2014, the United States has the right to apply sanctions, withholding 30% of the amounts of transactions involving American counterparties.

Requiring such information from foreign banks, which are in no way obligated to report directly to the IRS, creates a lot of legal problems and issues. At a minimum, the provision of any information to the IRS violates the principle of bank secrecy enshrined in Art. 26 of the Federal Law of December 2, 1990 No. 395-I "". Russian legislation provides for the provision of information about customer accounts and deposits only to Russian tax authorities, who can act at the request of a foreign tax service and only if there is an international treaty between Russia and a foreign state (). And such restrictions are enshrined in the legislation of almost all countries of the world. Therefore, the United States, within the framework of FATCA, has provided for the conclusion of intergovernmental agreements that will overcome certain legal obstacles and comply with IRS requirements without violating the domestic legislation of the state. Intergovernmental agreements may provide for two models of interaction between financial institutions and the IRS.

First model provides for the implementation of FATCA reporting through intergovernmental exchange of information and involves direct interaction between the tax authorities of the United States and other countries. It should be noted that within the framework of this model, information is transferred on a reciprocal basis - both about the accounts of American taxpayers in banks of the agreement country, and about the accounts of citizens of the agreement country in US banks.

OUR HELP The model for intergovernmental exchange of information on taxpayer accounts has been adopted by the Organization for Economic Co-operation and Development (OECD), which includes both the United States and member countries of the European Union. On May 6, 2014, OECD countries and 13 other acceding countries signed a declaration on the implementation of a system for the automatic exchange of tax information. As part of this agreement, the tax authorities of these countries will be able to exchange information about taxpayers' accounts annually on an automatic basis within a single information base - that is, without sending official requests.

Second model provides for direct reporting to the US Internal Revenue Service by financial organizations, without tying such actions to national tax authorities. In this case, the information is provided to the IRS unilaterally.

An intergovernmental agreement between Russia and the United States was not signed and Russian financial organizations found themselves caught between two fires - on the one hand, the US threat to withhold 30% of financial transactions involving American counterparties in case of failure to comply with FATCA requirements. On the other hand, there is criminal liability for disseminating bank secrecy and imprisonment as one of the punishment options, along with a fine and forced labor ().

Legislators did not stand aside and to solve this problem, Federal Law No. 173-FZ of June 28, 2014 (hereinafter referred to as the Law) was adopted.

This law determined the circle of Russian entities that belong to those financial organizations that FATCA imposes the obligation to transfer information. These, in addition to banks and credit organizations, also include insurers providing voluntary life insurance, brokers, trustees, non-state pension funds, investment funds and other organizations that provide financial services to persons subject to foreign tax legislation ().

Bank or other financial institution without fail must notify the Central Bank of the Russian Federation, the Federal Tax Service of Russia and the federal executive body for combating the laundering of proceeds from crime (hereinafter referred to as the authorized bodies) of its registration with the US Tax Service no later than three days from the date of registration ().

The law defines persons whose information is not subject to collection and transfer (). These include individuals - citizens of the Russian Federation who do not have a second citizenship, except in member countries of the Customs Union, and do not have a residence permit in a foreign country. It is worth noting that even if a citizen of the Russian Federation was born in the United States, but has neither American citizenship nor a residence permit, the law directly establishes prohibition on collection and transfer of information about such a person, although according to FATCA rules, information about him must be transmitted to the IRS. Information about legal entities created in accordance with the legislation of the Russian Federation, 90% of which are directly or indirectly controlled by the state or citizens of the Russian Federation who meet the requirements of the first paragraph, is not subject to collection and transfer. Thus, information about the accounts and deposits of any organizations with an “American” share in the authorized capital of more than 10% must be transferred to the US Tax Service.

Banks must develop criteria for inclusion and specific measures to identify foreign taxpayer clients (hereinafter referred to as clients) independently and publish them on their official website on the Internet (). The law does not establish a period during which these internal documents must be developed, but provides for the bank’s obligation to publish them no later than 15 calendar days from the date of their approval.

Having analyzed the websites of banks from the top twenty rating of banks by net assets of the Association of Russian Banks, mention of registration with the IRS was found on the websites only three banks(VTB, UniCredit Bank and AK BARS Bank), however, internal documents with criteria for identifying clients who are foreign taxpayers were not found. Two more banks have only indirect mention of compliance with FATCA, the remaining 15 banks do not have any information either about registration or about the criteria and measures for identifying clients who are foreign taxpayers on their official websites. During a random sample check, one bank was found outside the top 20 (Svyaznoy Bank), which defined the criteria for classifying clients as foreign taxpayers in an advertisement on the website.

OUR HELP List of Russian banks registered with the IRS.

The law establishes a significant restriction - banks have the right to transfer information about the client only with his consent(). Consent must be requested by the bank in writing. The client’s consent to transfer information to a foreign tax authority is also automatically considered consent to transfer the same information to authorized bodies - the Central Bank of the Russian Federation, the Federal Tax Service of Russia and the federal executive body for combating money laundering.

The client is given a deadline to respond at least 15 working days. If the client has not given his consent to the transfer of information or has not confirmed or denied his affiliation with foreign taxpayers within 15 working days from the date of sending the request by the bank, the latter has the right to unilaterally stop the financial transactions of such a client and even terminate the agreement with him for the provision of financial services. services (). If a decision is made to refuse to carry out financial transactions of the client, such refusal does not apply to the write-off of funds in the order of priority established, namely, on writs of execution for the collection of wages or severance pay, instructions from the Russian tax authorities, for the payment of insurance contributions to state funds , according to writs of execution for other monetary claims, for other monetary claims in calendar order. Also, blocking of the client’s financial transactions does not apply to transfers of funds to the client’s bank account opened in another bank, or the issuance of cash to the client.

Also the law imposes an obligation on the bank“duplicate” all collected and processed information about the client to the Russian authorized authorities. Thus, the bank must report the very fact of identifying such a client () within the time limits established by the Government of the Russian Federation; on receipt of a request from a foreign tax authority within two days from the date of its receipt (). No later than 10 working days before departure information about the client to a foreign tax authority, the bank is obliged to provide the collected information to the authorized authorities. Based on the results of consideration of this information, the federal executive authority for combating income laundering may impose a ban on sending information to a foreign tax authority.

Another innovation was the procedure for clients to open accounts and deposits in banks. If the bank has a reasonable, documented assumption that the client belongs to the category of foreign taxpayers, the bank must request from him the data necessary to accurately identify him as such a client (for example, a copy of the passport, a certificate of registration of a legal entity, a list of founders, etc. .p.) and at the same time consent to transfer information to foreign tax authorities. If such data and consent are not received from the client within 15 working days, the bank has the right to refuse to conclude a bank account or deposit agreement.

The law also provides for retaliation the obligation of foreign financial organizations to report details accounts opened with them or deposits of citizens of the Russian Federation and legal entities that are directly or indirectly controlled by citizens of the Russian Federation, annually until September 30 of the year following the year in which these accounts were opened.

FOR REFERENCE


Controllers were asked to recognize a person who, directly or indirectly (through third parties) could determine the actions or influence the decisions of a legal entity (Draft Federal Law No. 47538-6 ""). It was intended to establish a “presumption of a controlling person” in one of the following cases if the person:

• had a dominant share in the authorized capital of a legal entity;
• was recognized as controlling on the basis of an agreement;
• had the right to give instructions binding on a legal entity;
• had the opportunity to influence the election or appointment of the sole executive body or more than half of the composition of the collegial management body.

Persons through whom or jointly with whom such control is exercised were also proposed to be recognized as controlling persons. However, the ability to veto a decision by the governing body of a legal entity was not enough to recognize control over that legal entity.

These changes were not adopted and in Russian legislation today there is no legal definition of control and a controlling person.

The same law introduced amendments to the Code of Administrative Offenses of the Russian Federation, providing for liability of both officials of financial organizations and financial organizations themselves for failure to provide or provision in violation of the deadline or other conditions of information about the client. The fine varies from 20 thousand rubles. up to 50 thousand rubles. for officials and from 300 thousand rubles. up to 1 million rubles for a financial organization across the entire range of violations ().

Oddly enough, sanctions against foreign financial organizations for failure by other states to provide information about Russian taxpayers, similar to FATCA, are not established by law.

The steps taken are intended increase the capacity of national budgets And increase transparency of banking operations to track the financing of terrorist and other criminal organizations. What will come of this, only time will tell.

The fact that today it is becoming less and less popular to be a US citizen is largely due to the law adopted in this country in 2010 and which came into force on July 1, 2014 “On the Taxation of Foreign Accounts” (Foreign Account Tax Compliance Act - FATCA). The idea for this law arose when the US government was calculating lost taxes. Their amount was approximately $100,000 billion, and these are only offshore schemes, not taking into account citizens’ deposits in foreign banks. As a result of the calculation, it was decided to take measures to correct this problem in the form of a bill, which, after being signed by the head of the American state, came into force. This was the main reason for the large number of renunciations of US citizenship among its residents living and working in other countries.

What is FATCA

FATCA - what is it? This is a US tax law that requires foreign financial institutions to report to that country's Internal Revenue Service (IRS) about clients who are US taxpayers. The official purpose of FATCA is to prevent tax evasion by American citizens. Under US law, all individuals and legal entities who have citizenship or are residents of this country are required to pay tax, regardless of the place where they live and receive income from work, conduct business or own property. But many citizens are not satisfied with this state of affairs, so they try to conduct financial activities through banks located outside their country.

Before the adoption of the law, the relevant US services were not able to somehow track their financial activities and obtain information on accounts in foreign banks. But the situation changed dramatically after FATCA came into force. What did this give to the special services? Effective immediately, all countries or their financial institutions must report U.S. taxpayer customers to the IRS for FATCA purposes. The law is, to put it mildly, arrogant, as it affects the interests of not only US citizens, but also legal entities of all other states.

Levers of influence, method of monitoring compliance with FATCA

In order to seamlessly transfer FATCA information, foreign financial organizations or countries are asked to enter into special agreements with the relevant US agency to ensure control over the accounts of US taxpayers. Anyone who refuses the offer will face a number of surprises, which include measures such as sanctions, forced withholding of 30% of the amount of customer transfers through the US banking system, as well as through banks that signed such an agreement, or even closing access to the main reserve currency for entire countries with a subsequent reduction in part of international trade. Therefore, an impressive queue lined up to sign the agreement, consisting of various states and individual financial organizations that understand the importance of the US system in the flow of funds, but at the same time are trying to avoid violating privacy laws. An agreement can be concluded not only with various countries in an intergovernmental form, but also with individual financial institutions, if the state in whose territory they operate cannot accept this agreement for some reason.

Agreement Models

Since the FATCA law provides for two options for intergovernmental agreements, there are also two models for the transfer of information provided for by them:

1. According to the first model, financial institutions submit reports on the accounts of clients belonging to American taxpayers to the internal services of their country. Subsequently, these services transfer the information to US special services.
2. The second model involves the transfer of data on such clients by financial institutions themselves, which have entered into a direct agreement with the US tax authorities.

By 2017, the Russian Federation had not signed an intergovernmental agreement for the transfer of information for FATCA purposes. What does this mean for Russian citizens? Formally, banks and other organizations are not required to report to American services. But this circumstance promises clients of Russian financial institutions unwanted problems when making payments and transactions through American correspondent accounts in the form of sanctions.

Russian legislation gives the go-ahead for domestic banks to transfer information to US services

As a result of heated discussions by the Russian government on the entry into force of FATCA, its possible consequences and contradictions with the laws of the Russian Federation, the head of state signed a law designed to help domestic financial companies register on the website of the US tax services to comply with FATCA. What does this allow Russian organizations to do? Legally share required U.S. taxpayer information as part of an information sharing agreement, but only with the client's consent. If a person refuses to transfer data, any bank has the right not to work with this person. Before transfer, all data must go through the Central Bank and Rosfinmonitoring, which has the right to stop it.

FATCA reporting form

In an attempt to eliminate unwanted deductions from customer accounts, 90% of banks and organizations from Russia privately agreed and registered with the US federal service. Therefore, when opening accounts in many banks today, you may be faced with the inevitability of filling out a certain document. The FATCA form is a short questionnaire that makes it easy to determine the need to transfer information about a given client to American services. If the client is not related to taxes in the United States, then information about him will remain closed to American services.

Bankers' concerns

This information collection mechanism may not be efficient enough, resulting in fines, withholdings, or losses for companies on GIIN registrations. The absence of such a number from a financial organization is the basis for the application of sanctions to it for failure to comply with FATCA. The number of domestic institutions that will be able to retain their GIIN after data transfer in 2017 remains unclear. Many bankers express fears that the American government, if desired, will find a lot of violations in the actions of Russian organizations. Therefore, the threat of sanctions in connection with violations of FATCA is more real than the possible blocking of payment systems that banks predicted. FATCA has many ambiguities and ambiguities, which leave wide scope for the services that control its implementation.

Registration for FATCA purposes, Sberbank. What is this?

One of the first organizations to register with the US IRS is Sberbank. The entire company, including the main department and 208 institutions under its control, received the status of a financial institution that complies with FATCA requirements. What does it mean? Sberbank is obliged to identify among its clients those who are involved in paying taxes in the States. As of the date of registration, the bank has about 20,000 clients who are American citizens or are among the other categories required to pay tax in this country. These include:

Legal entities:

• organizations where residents have a share of more than 10%;
• companies registered in America.

Individuals:

• American citizenship;
• green map;
• birth in America;
• US mailing address;
• American telephone number;
• a power of attorney issued to a person with an address in the USA;
• the right of signature to a person with the same address;
• instructions for transferring amounts to the USA;
• "on demand" address, if it is the only one for the account.

In the future, the number of clients falling into these categories may increase, since there are no obstacles to serving individuals who are willing to consent to the transfer of information to the States. This information is necessary to comply with the mandatory conditions of FATCA (Sberbank). What difference does this make in service? Sberbank asks you to fill out an additional form attached to the package of documents.

Bank procedure

When working with clients, Sberbank determines the FATCA status for each based on the data from completed questionnaires, and then generates a report. Based on the results of the information received, those who are related to American taxes are identified. What happens next:

1. Informing the client about the presence of signs of belonging to American taxpayers.
2. Client confirmation of status with forms w-9 or w-8. Or documentary evidence of non-compliance with this.
3. Obtaining consent from the client to transfer data to the IRS. Or, in the absence of forms or documents of refutation, his transition to the status of refuseniks.

The fact that Sberbank is registered with the IRS obliges it to provide, if necessary, the American government with access to the accounts of US taxpayers located in a Sberbank institution in the Russian Federation. At the same time, Sberbank does not see any obstacles to fulfilling its regular duties with the emergence of the need to inform the States about the savings of their taxpayers.

Russia's entry into the European FATCA

Russia will soon join Euro-FATCA. This is a new bill, similar to the American one in terms of regulation, but unlike which, in case of refusal to cooperate, it does not provide for penalties, but a complete ban on activities for refuseniks in the EU. Russia's accession is planned for 2018 within the framework of the European Convention of 1988, according to which participants are obliged to provide assistance to each other and exchange information on tax matters. From the date of entry into Euro-FATCA, Russian services will be able not only to transmit data about EU taxpayers, but also to receive information about European accounts of domestic citizens.