FATCA & CRS

International Client Tax Reporting

In recent years many countries, including most offshore jurisdictions, have signed treaties and implemented agreements in order to assist each other with their common pursuit of global tax transparency. As these agreements are implemented, EQIBank is obliged to collect additional information from its clients in order to confirm tax residency details for its account holders. Based on tax residency and or US citizenship, EQIBank has a legal obligation to report customers financial account information to the relevant local, regional or extra-regional tax authority.

EQIBank is required to collect information and documentation from individual and entity customers to establish their tax residency. For most individual clients this is usually the jurisdiction where they reside and pay taxes. US Citizens, however, are also treated as US residents for tax purposes, regardless of their country of residence. If you are unsure about your tax residency or US Status, you should seek advice from a professional tax adviser or the relevant tax authority. EQIBank does not provide tax advice.

Foreign Account Tax Compliance Act (FATCA)

FATCA was enacted in 2010 by the US Congress to target non-compliance by U.S. taxpayers using foreign accounts. FATCA requires foreign financial institutions (FFIs) to report to the IRS information about financial accounts held by U.S. taxpayers, or by foreign entities in which U.S. taxpayers hold a substantial ownership interest. In most Caribbean jurisdictions, FATCA is implemented locally through an Intergovernmental Agreement (IGA).

Who are US Persons under FACTA

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

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. 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

Learn more about FATCA from the US IRS webiste >

Common Reporting Standard (CRS)

The Organization for Economic Cooperation and Development (OECD) developed the Common Reporting Standard (CRS) in response to the G20 request for jurisdictions to obtain information from financial institutions and to automatically exchange that information with other jurisdictions on an annual basis. The CRS, based on FATCA, is being adopted by a large and growing number of countries including most Caribbean jurisdictions. It requires EQIBank to collect information from individuals and entities to establish their tax residency. Depending on the account holder’s tax residency, the bank may also be required to report financial account details to the relevant tax authorities.

Learn more about CRS on the OECD website >