Aim of FATCA
The aim of the US tax law known as the “Foreign Account Tax Compliance Act” (hereafter FATCA) is to prevent US Persons from evading the payment of taxes when they have direct or indirect banking relations outside the United States. To achieve this aim, starting in 2015, FATCA compels foreign financial institutions to make an annual declaration to the US Internal Revenue Service (IRS) detailing the accounts and assets held by US taxpayers in such foreign financial institutions.
FATCA in Luxembourg
On 28 March 2014 Luxembourg finalised an intergovernmental agreement (IGA) with the U.S. Department of the Treasury designed to aid compliance through the automatic exchange of tax information between the tax authorities of both countries.
Under this IGA incorporated into Luxembourg law by the act of 24 July 2015 regarding FATCA, financial institutions in the Grand Duchy report information on the identity, balances of all accounts and income of US Persons directly to the Luxembourg tax authorities (ACD - Administration des Contributions Directes), which in turn reports the information to the IRS.
FATCA at BCEE
The BCEE has introduced all measures necessary to ensure compliance with the IGA by registering with the IRS as a Participating Foreign Financial Institution (“Reporting Model 1 FFI”). The BCEE’s IRS Global Intermediary Identification Number (GIIN) is U80MWB.99999.SL.442.
FATCA and BCEE’s customers
The identification and documentation process for US Persons started on 1 July 2014, and the first declaration was made to the IRS in August 2015 relating to the assets held as at 31 December 2014.
Private customers whose data includes one or more indicators of American status (such as nationality, place of birth, residence, address, telephone number, standing order or power of attorney given to a US Person) must provide the required documentation to the BCEE to establish whether or not they are a US citizen or a US resident.
Business customers whose data includes one or more indicators of American status (such as registered office, incorporation, postal address or the beneficial owner is a US Person) must provide the required documentation to the BCEE in order to establish their FATCA status.
The Bank contacts the customers concerned by FATCA to assist in providing the information to meet the reporting requirements of the Act.
FATCA and BCEE’s funds
To ensure compliance of BCEE’s funds with the IGA, bearer shares will no longer be issued, exchanged or accepted for custody.
In view of the fact that the customer is solely responsible for meeting their tax obligations, and given that this information is intended to be merely informative on behalf of BCEE, it is recommended that the customer submits information and statements of account received by the Bank for assessment to their tax adviser in their country of residence.