Foreign Account Tax Compliance Act (FATCA) Readiness Assessment

How many US customers do you have?

Ultimately, data quality is a business function that should be supported by IT.

FATCAUS FATCA regulations signed into law in 2010 require Foreign Financial Institutions to classify their (US) customers under U.S. tax principles. FATCA creates the need for financial institutions to gather sensitive client data to identify accounts for the purpose of reporting and monitoring data provided to the US Internal Revenue Service.

Organizations will have to examine and –if necessary - obtain information such as U.S. Tax Status, U.S. Citizen/Residence Status, Place of Birth and account details. Account balances may also be used to determine certain thresholds and for reporting to U.S. accounts. Industry classification codes and ownership hierarchies may also be used to correctly classify organizations, entities and individuals.

Failure to comply will be costly and could result in a 30% withholding on taxable Payments, including U.S. source investment income, including dividends, interest and royalties, and gross proceeds from the disposition of property that could produce U.S. source dividends or interest.

South African companies need to balance the need to report on non-compliant US account holders with the need to protect customer privacy in terms of the Protection of personal Information act. This may require financial insititutions to consolidate customer and account information in order to enusre that customers meet minimu thresholds for reporting.

In addition, SARS FATCA reporting requires address data to be broken into granular address fields - such as house number street name, street type and so on. How much weffort is required to do this, across all your systems.

Assess FATCA Readiness in weeks
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