FATCA

How will FATCA affect me?

The FATCA regulations include the following important requirements for bank customers:

Individuals and entities with connections to the US are, for their bank, required:

• to submit form W-9 and a consent for filing a report to the US tax authorities, or
• to submit form W-8BEN, wherein they formally declare that they are not resident in the US for tax purposes.

Customers and entities without a US connection, or with a US connection but without unlimited tax liability in the US, need to submit form

• W-8BEN (for natural persons) or
• W-8BEN-E (for entities) to their bank upon request in order to document their non-US status and as confirmation that there are no US owners.

These forms are in each case valid for three years after the year in which they are signed and have to be renewed at regular intervals.

The consequences of non-disclosure or non-consent

As soon as a US connection as defined by FATCA becomes apparent, the bank must, within defined periods, clarify with the customer whether he or she is liable to US tax. If the customer refuses to clarify this matter by not answering the questions or by not signing the forms, he or she is assigned a “non-consenting” status under FATCA. The expiry of a form (i.e. expiry of the three-year period) can also result in a reporting requirement for the customer.

Financial institutions are required to report the number of non-disclosed customers and the non-disclosed investment volume. The first report was filed at the end of March 2015 for the 2014 reporting period. The US can submit a request to the Republic of Austria for disclosure of these customers by way of a request for judicial assistance.

Which data are reported?

Information on the account holder:

• Name
• Address of domicile
• US TIN (US tax identification number or social insurance number)
• Date of birth (if a US TIN is not provided)
• Nationality

Account information:

• Account number (current accounts, savings accounts, term deposits and safe-custody accounts)
• Account balance or value of the account as of 31 December, or the amounts which have accrued in connection with the closure or transfer of the account
• Income transactions, broken down into
  • Interest
  • Dividends
  • Gross proceeds – total gross proceeds from the sale and/or repayment of positions (regardless of whether or not the transactions are subject to tax)
  • The currency code

All “non-consenting” account holders are reported in a pooled reporting. These include all customers for whom the required FATCA documentation (or its renewal) was not provided. These are reported as “non-consenting” customers to the US tax authorities in a pooled reporting. In accordance with general practice, the requisite information is disclosed once a year on the basis of a request for judicial assistance submitted by the US tax authorities to the Austrian Federal Ministry of Finance. The reporting data which are disclosed correspond to the aforementioned reporting data of regular FATCA reporting.