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FATCA

Foreign Account Tax Compliance Act ("FATCA").

Since 1st July 2014.

 
What is FATCA

The Foreign Account Tax Compliance Act ("FATCA") is a United States of America (USA) law with the purpose of fighting the tax evasion of the non exempt American taxpayers (US Persons) that have income outside that country.

This Act will be in force from 1st July 2014 onwards and it is applicable to all financial institutions around the world.

With the purpose of easily implement FATCA, several countries, including Portugal, have already confirmed the existence of an intergovernmental agreement (IGA) with the USA allowing the annual exchange of tax information. These countries agreed to include FATCA in their legal framework.

The Foreign Financial Institutions ("EFIs") in perspective to the USA, definition where Best is included, need to identify the customers designated as US Persons. All banks and financial institutions headquartered in Portugal must identify and report to the Portuguese tax authorities, annually, information about the financial assets of the customers identified as US Persons.

 

Best has developed efforts in order to comply with FATCA by the date in which it comes into force, 1st July 2014.

Within the FATCA scope, all Customers that have one of the following characteristics are considered a US Person:

  • American citizenship, including those with dual citizenship and American passport, even though they reside outside the USA.
  • Green card owners.
  • Have been born in the USA, except those who renounced citizenship.
  • Have a permanent residence in the USA or have a substantial presence in the country (at least 183 days over the last 3 years and with specific rules).
  • Is an entity/partnership created or organized in the USA or under the law of the USA.
  • Foreign entities whose beneficial owners are US Persons and that, directly or indirectly hold shares representing more than 25% (Substantial US owners).

FATCA will not have any impact on most of Best Costumers.

Best has already adjusted the account opening procedures so it gathers all the necessary information for the correct characterization of its US Person customers.

Best will review all the information in its database so as to identify the customers that are considered US Persons under FATCA’s terms.

You can visit the IRS official website for more information: www.irs.gov/Businesses/Corporations/Foreign-Account-Tax-Compliance-Act-FATCA.