FATCA stands for the Foreign Account Tax Compliance Act.
Introduced by the United States Department of Treasury and the US Internal Revenue Service (IRS), the purpose of FATCA is to encourage better tax compliance by preventing US persons from using banks and other financial organizations to avoid US taxation on their income and assets.
On 28 March 2014, Luxembourg agreed to enter into an Inter-governmental Agreement (IGA) with the US, which entered into force on 24 July 2015.
In order to comply with FATCA legislation, KBL epb conducts reviews of new and existing clients to identify those who are reportable under FATCA.
KBL epb and the other financial organizations in Luxembourg report information on financial accounts held directly or indirectly by US persons to the US tax authorities (IRS) on an annual basis, through their local tax authorities.
In addition, KBL epb may be required to report information about clients who are not US persons but who do not provide the required documentation.
Where clients fail to provide the appropriate documentation and/or when doing business with non-compliant entities, KBL epb may be required to apply a 30% US withholding tax on certain types of US income paid to such clients.
In line with FATCA, it is important that you provide us with the information and forms to establish your tax status under FATCA (please see the section on US forms). These forms have to be updated on a justified request from the Bank or when justified by a change in cirumstances (change of country of tax residence, change of business, name, etc.). This update must be made within a period of a maximum of 90 days under the risk of being classed as reportable and subject to higher taxation on income from US sources.
Due to legal restrictions, KBL epb cannot offer advice on your FATCA tax status or classification. In order to help you avoid common errors, please visit the IRS website or contact a professional tax advisor if you require assistance.
The information reported to the local tax authority will depend on your FATCA classification.
This information will typically be of a non-financial nature (for example, name, address, US taxpayer identification number), and of a financial nature (for example, account number, account balance, income paid into the account).
ALL NATURAL PERSONS WHO ARE ACCOUNT OR JOINT ACCOUNT HOLDERS
ALL LEGAL PERSONS WHO ARE ACCOUNT HOLDERS