Fatca Facts

1.  Are you a citizen of the United States (US)?
2.  Are you a lawful resident of the US?
3. Do you have a power of attorney or are you an authorised signatory on an account
   which has a US address?
4.  Do you have a US telephone number or address on your account?
5.  Does your corporation have any specified US person who owns, directly or indirectly, more than 10% of the stock of the corporation (by vote or value)?
6.  Does your partnership have any specified US person who owns, directly or indirectly,
   more than 10% of the profit or capital interests of the partnership?
7. Does your trust have any specified US person who holds, directly or indirectly,
   more than 10% of the beneficial interest?
8. Do you have an account with a portfolio value in excess of US$1 million?
9. Do you have standing instructions to transfer funds to an account maintained in the US or directions to regularly receive funds from a US address? If your answer to any of the above questions is ‘yes’, you may be considered a specified US person (US person) and liable to be reported
   under the FATCA regulation. Mayberry Investments Limited (MIL) is happy to guide you, our client, along the path to being FATCA compliant.

Foreign Account Tax Compliance Act (FATCA) is a new US law directed at financial institutions located outside of the US jurisdiction. FATCA requires foreign financial institutions (FFIs) to report to the Internal Revenue Service (IRS) about US persons. FATCA reinforced the responsibility of US individuals to report their financial accounts held outside of the United States to the IRS on their annual tax report.

FATCA could have a direct and profound impact on FFIs that have US proprietary investments, US account holders, or US financial dealings. All financial accounts that are owned, directly or indirectly, by a US person will be affected by FATCA.

Financial Account refers to any depository and custodial account maintained by financial institutions or a non-publicly traded debt or equity interest in a financial institution.

A US Account is a financial account that is held by one or more specified US persons or US-owned foreign entities.

A Specified US Person is an individual who is a US citizen and/or resident, a privately owned domestic corporation, a domestic partnership, and/or a domestic trust.

A US-Owned Foreign Entity is a foreign entity that has one or more substantial US owners. A substantial US owner means, in the case of a corporation, any specified US person that owns, directly or indirectly, more than 10% of the stock of such corporation by vote or value. Comparable rules are provided for ownership in partnerships and trusts. FATCA will have an impact on individuals who earn US source income, are US citizens or US residents.

If you are a US person, we are required to ask you to complete an IRS W-9 form, MIL’s consent form and a declaration form for ourrecords. Additionally, your account may be included in annual reports to Tax Administration Jamaica (TAJ), which will then forward these reports to the IRS.

FATCA was enacted by the US in an effort to combat offshore tax evasion. The legislation was enacted as a means of remedying perceived deficiencies in the current methods used by the IRS and the US Department of Justice to identify US persons who utilise foreign financial accounts or foreign entities and, thereby, provide more information to better enforce compliance.

The overall purpose of FATCA is to detect, deter and discourage offshore tax abuses through increased transparency, enhanced reporting and strong sanctions. The ultimate goal of this legislation is for the US to obtain information about offshore accounts and investments beneficially owned by US taxpayers.

The law was enacted in March, 2010, but will take effect on July 1, 2014.

“Withholdable” payment refers to:

• Any payment of interest (including any original issue discount), dividends, rents, salaries, wages, premiums, annuities, compensation, remunerations, emoluments, and other fixed or determinable annual or periodical gains, profits and income from sources within the United States;
• Interest paid on deposits by foreign branches of domestic banks (which normally would be foreign source income); and
• Gross proceeds from the sale of or other disposition of US stocks and securities.

An account holder who does not comply with reasonable requests for information necessary to determine whether the account is a US account will be deemed as a recalcitrant account holder.

A recalcitrant account holder is:

 

• Any person refusing to supply identifying information requested relevant to their FATCA status; or

 

• Any identified US person who does not waive local legal restrictions in order to enable the FFI to report the relevant information to the IRS.

Any person who refuses to participate will be deemed as a recalcitrant account holder. Your account will be reported as a recalcitrant account.

Your account will not be automatically subject to reporting. However, your account will be given closer scrutiny.

A joint account that has one or more of the joint owners qualifying as a US person will be reported as that of a US person. Any required reporting would treat each US person as the owner of the entire account.

FATCA is a US-enacted law that imposes compliance obligations on MIL. MIL is also subjected to local laws and regulations. FATCA requires that MIL: obtain, verifiy and transmit information to the IRS, report accounts of certain account holders deemed as recalcitrant account holders, collect a 30% US withholding tax on “withholdable” payments made to non-compliant FFIs.

MIL has a policy of strict adherence to privacy laws and protection of our clients’ data. We will be obtaining the necessary disclosures from our clients as we seek to comply with FATCA, as well as our local laws.