FATCA which stands for Foreign Account Tax Compliance Act was passed as part of the HIRE Act. FATCA is a US legislation and is brought into existence to increase the transparency for the US Internal Revenue Service (IRS) and to ensure strict adherence to tax rules and regulations as per the law. There are many complicated guidelines is included under this legislation which can be accessed by the professional who understands the detailed of FATCA compliance Singapore like a pro. These professionals provide FATCA services as part of their Global Information Reporting capabilities.
They prevent offshore tax avoidance by US citizens or residents (including those living outside the USA) with FATCA classification, registration, onboarding, pre-existing account due diligence and reporting.
FATCA majorly affects two communities-
- US taxpayers who are investing or earning income through non-US financial institutions and need to file accurate reports on their financial accounts and offshore assets.
- Foreign Financial Institutions (FFIs) need to file a till date report on financial accounts held by US taxpayers or foreign entities in which US taxpayers hold substantial ownership.
FATCA Singapore is a quite broad term and exerts serious consequences, not only on US-based companies but also on companies possessing US assets or clients and more. According to experts, non-compliance with FATCA law in Singapore can have adverse tax and commercial consequences. To get a protection shield from FATCA consequences, many jurisdictions around the world have signed an intergovernmental agreement (IGA) and combined FATCA into their domestic laws.
Business Challenges Experienced With The Implementation of FATCA in Singapore
The implementation of the FATCA legislation poses drastic challenges in the running operations of the banking and financial services industry. These challenges are:
- Linking financial accounts information of a US taxpayer across branches, subsidiaries, and business units too.
- Need to comply with complicated verification and due diligence process prescribed under FATCA federal tax Singapore, to determine whether the account belongs to US citizen or not.
- Maintaining an updated status of FFIs, NFFEs and account holders
- Implementation of complicated business rules in the payment process, to withholding tax on payments made to FFIs. NFFEs and recalcitrant account holders.
Expert Assistance To FATCA Challenges
FATCA regulation experts have been standing at the forefront for tracking the development made towards this legislation. Their years of experience in the taxation industry and deep domain knowledge empowered them to build custom solutions for financial institutions, to comply with FATCA and its complicated laws effectively.
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FATCA experts assist clients in plenty of ways:
- Account Identification-To overcome the complications of FATCA law Singapore, tax professionals enable the financial enterprise to identify the accounts of US citizens, as prescribed under its law- taking into consideration the account of one’s exempted from FATCA.
- FFI Registration- We aid FFIs requirement to register with the US Internal Revenue Service (IRS) to obtain a GIIN (Global Intermediary Identification Number).
- FATCA timely reporting-Entities are required to submit information either to their local tax authority or directly to US authorities which is quite a time-consuming process. Hiring professional tax-reporting services will help you to prepare and file reportable accounts following FACTA regulations.
Complying with FATCA laws is not a kids’ game, it requires the expertise of a FATCA-knowledgeable professional. Thus, being an NRI investor or US citizen, if you are planning to invest in offshore funds get the reliable assistance of a FATCA-centric tax pro.