FATCA – Foreign Account Tax Compliance Act
What is FATCA?
The Foreign Account Tax Compliance Act (FATCA) is a US law designed to prevent offshore tax evasion by US Persons. It applies to financial institutions worldwide. Many countries have implemented FATCA in local law.
FATCA requires non-US financial institutions, called Foreign Financial Institutions (FFIs), to identify and report accounts held by reportable customers. Reportable customers are US Persons, specific types of non-US entities with US Owners or US Controlling Persons, and customers who do not comply with FATCA.
What is ING’s policy for FATCA? Will ING Bank comply with FATCA?
ING Bank’s policy is to comply with FATCA globally.
What does FATCA mean for our customers?
Customers affected by FATCA (reportable customers), or in cases where the FATCA classification is unclear, will be contacted by us. They may be asked to provide more information to confirm whether they are a US Person for tax purposes. They do not need to pro-actively approach ING.
Which customers are reportable?
Reportable customers are:
- US Persons (individuals and entities), unless they fall under the exemption that applies to specific types of US entities (e.g. publically listed US corporations);
- Specific types of non-US entities with US owners or US controlling persons; and
- Customers who do not comply with FATCA or do not respond to requests for information.
Will ING Bank exit US customers because of FATCA?
The objective of FATCA is to report accounts held by reportable customers, not exit them. ING Bank is open for business with US Persons who comply with FATCA. The products available to US Persons do not change because of FATCA.
Will customer information be sent to the US without informing customers?
No. ING will endeavour to contact reportable customers and give them an opportunity to correct their FATCA classification prior to reporting them for the first time. Reporting will be handled by each ING entity locally, in accordance with the rules applicable to FATCA in each host country.
What are the consequences of non-compliance?
Foreign Financial Institutions that do not comply and their customers are subject to a 30% withholding tax on US source income.
Customers who do not comply with FATCA are reportable. ING Bank will report according to the host country’s rules. If identifying information is not or cannot be reported, the 30% penalty withholding tax applies to the customer’s US source income and their financial accounts will be closed.
For more FATCA information, please turn to your Relationship manager.