What are the FATCA reporting requirements?
As part of being FATCA compliant, financial institutions are responsible for reporting information in relation to financial accounts to the US Internal Revenue Service (or the local tax authority where specified by a FATCA Intergovernmental Agreement). Reporting will generally be required on accounts held by certain US persons, passive entities with substantial US ownership or that are under US control, as well as non-responsive account holders.
FATCA reporting: intergovernmental agreements
Some countries and jurisdictions have entered into intergovernmental agreements (IGA) with the IRS to build FATCA compliance into their legal framework. This will affect the way that non-US Foreign Financial Institutions (FFI) report information on US reportable accounts they hold.
Currently there are two models for IGAs:
- IGA model 1 (M1) requires an FFI to provide information on reportable accounts they hold to the local tax authority of the resident country or jurisdiction
- IGA model 2 (M2) requires an FFI to provide information on reportable accounts they hold directly to the IRS, and where requested, to the local tax authority of the resident country or jurisdiction
Jurisdictions treated as having an intergovernmental agreement in effect can be viewed on the US Treasury website.
For more information, please the IRS's FATCA FAQs.
Last updated: 7 August 2018