Foreign Account Tax Compliance Act (FATCA)
FATCA - Time to act now
The Foreign Account Tax Compliance Act (FATCA) is an important development in U.S efforts to
reduce offshore tax evasion by US taxpayers who hold some or all of their investments and other
assets in foreign accounts.
FATCA will require foreign financial institutions to report information about
financial accounts held by U.S. taxpayers, or held by foreign entities in which U.S. taxpayers hold a
substantial ownership interest.
The challenge
The complex FATCA requirements will be phased in over several years, starting from January 2014.
This will apply to firms right across the Financial Services sector, including Banking, Life Insurance,
Asset & Wealth Management, Broker Dealers, and Custodians. FATCA will impact Individuals who
may be U.S. persons, Non-Financial Foreign Entities (privately held corporations, partnerships, and
trusts), as well as Foreign Financial Institutions (including counterparties).
Impacted firms will have an obligation to conduct due diligence on new and existing accounts to
establish the ‘US account’ status of individuals and entity account holders, according to certain
prescribed rules, reporting annually to the IRS or home country tax authority.
Shaping and realising your FATCA vision
CGI’s FATCA solution comprises an end-to-end service from design through build and run, drawing
from global business units, service lines and external partners. Our FATCA consulting and IT service
is designed for scalability across diverse global financial institutions. We advocate a modular
approach, which addresses the requirements for capturing and storing the new FATCA client data,
remediation of existing account holders, withholding on certain payments, and reporting in a
practical, phased-in manner.
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