General
Request to Customers Concerning the Foreign Account Tax Compliance Act (FATCA)
The Foreign Account Tax Compliance Act (“FATCA”) was introduced in March 2010 in the United States (U.S.). It is designed to prevent tax evasion by U.S. taxpayers using their accounts opened in financial institutions overseas (meaning countries other than the U.S.).
If our customers are U.S. citizens for the purpose of FATCA (U.S. taxpayers) as described below, Demerara Bank Limited will report on specified accounts periodically to the U.S. Internal Revenue Service either directly or through our local regulatory agencies. We therefore will require our customers who are subject to this reporting to submit documents stipulated by the Bank, including a statement agreeing to the information disclosure. Failure to comply with the Act results in a 30% withholding of certain payments to accounts held by non-cooperating citizens.
Who does FATCA apply to?
- U.S. citizens for the purpose of FATCA refer to U.S. citizens under the U.S. taxation laws. They are not limited to people who have U.S. citizenship or nationality but include people who have permanent residency in the U.S. (Green Card) and people who are residents in the U.S.
- U.S. Entities – A partnership, Sole Trader, Company, Association, or Trust, created or organized or incorporated in the U.S. or under laws of the U.S.
- Individuals and Entities with U.S. Indicia. A U.S. Indicia is an indicator that an individual/entity has some affiliation with the United States.
Below is a list of Indicia for U.S. individuals
- U.S. citizen or resident (green card) status
- U.S. place of Birth
- U.S. home or mailing address
- If your only address is a U.S. Post Office Box, ‘in care of’ U.S. address, or hold mail address
- A person that meets the substantial presence test
- Power of Attorney granted to someone with a U.S. address
- A U.S. telephone number
- Standing Order to transfer funds to an account maintained in the U.S. or instructions regularly received from a U.S. address
Entities
- An entity formed in the U.S. or under U.S. laws
- Entities where shareholders with more than 10% shareholding have U.S. Indicia
If you have U.S. Indicia, you are required to fill Forms W-9, W-8BEN, and/or W-8BEN-E and/or a Bank declaration. Further, you will be required to provide appropriate documentary evidence (e.g., Passport, ID, driver’s licence, green card) to the Bank.
The Bank cannot offer advice on your FATCA Tax status or classification. For more information on FATCA, you can visit the IRS website at www.irs.gov/FATCA or contact a professional tax advisor.
Frequently Asked Questions (FAQs)
FATCA stands for the Foreign Account Tax Compliance Act. It is a new piece of legislation to help counter tax evasion in the US. Introduced by the United States Department of Treasury (Treasury) and the US Internal Revenue Service (IRS), the purpose of FATCA is to encourage better tax compliance by preventing US Persons (see glossary) from using Banks and other Financial Organisations to avoid US taxation on their income and assets.
On an annual basis, Banks and other Financial Organisations will be required to report information on financial accounts held directly or indirectly by US Persons. Demerara Bank Limited has made a commitment to being fully FATCA compliant. We will therefore be reviewing our existing customer base to confirm the FATCA statuses of our customers and where necessary we may have to contact our customers for further information and documentation.
Individual Customers
No. If an individual’s account holds any of the following seven criteria, the Bank may request further information/ documentation to determine if you are a US Person under FATCA.
- US citizenship or US residence
- US place of birth
- US address including US PO boxes
- US telephone number
- Repeating payment instructions to pay amounts to a US address or an account maintained in the US
- Current Power of Attorney or signatory authority granted to a person with a US address
- In Care of or Hold mail address which is the sole address for the account holder
No. The impacts of FATCA are wider than just US companies. The Bank will be reaching out to many business customers to determine their status under FATCA. The aim of this exercise is to identify customers which are reportable under FATCA. We will be communicating with customers who need to take further action.
FATCA Forms & Documents
Form to identify those that are reportable under FATCA