Withholding

General FATCA withholding requirements

Foreign Financial Institutions (FFIs) that enter into an agreement with the IRS to comply with FATCA (or who are otherwise compliant with FATCA pursuant to domestic FATCA legislation introduced pursuant to FATCA inter-governmental agreements) may be required to withhold 30 percent on certain payments to payees if such payees do not comply with FATCA or do not provide suitable identifying documentation as required under FATCA.

To avoid being withheld upon, FFIs should, where applicable, comply with FATCA, for example by registering with the IRS.

FATCA regulations exempt many categories of FFIs from the requirement to register, including most governmental entities, most non-profit organisations, as well as certain small, local financial institutions.

HSBC's FATCA withholding requirements

HSBC is committed to becoming fully FATCA compliant in all countries/jurisdictions where we operate. Existing client entities, who hold an in-scope product with HSBC and who are either non-participating with FATCA or who are unable to provide HSBC with information in relation to their FATCA classification where requested (including their Global Intermediary Identification Number), may be subject to 30 percent withholding tax on certain US sourced income.

 

Last updated: 7 August 2018