Foreign Accounts Tax Compliance Act (FATCA)

The Foreign Accounts Tax Compliance Act (FATCA) is U.S legislation that was enacted by U.S. Congress in March 2010 and came into force in July 2014. Its aim is to detect, deter and discourage offshore tax evasion by U.S. citizens or residents, who either directly or indirectly, invest outside the U.S. through foreign financial institutions.

Intergovernmental Agreement (IGA)

Several countries (including Cyprus, UK and Channel Islands) signed an Intergovernmental Agreement with the USA (IGA), in order to facilitate the implementation of FATCA provisions by Financial Institutions (FFIs) in their jurisdictions.

Impact on Bank of Cyprus and its customers

Bank of Cyprus Public Ltd (The Bank) is committed to comply fully with relevant FATCA legislation, regulations, guidelines and best practices. The Bank is therefore required to

  • register with the US IRS (registered asModel 1 IGA FFI – GIIN: M48NAV.00000.LE.196)
  • perform specific due diligence procedures to identify U.S. accounts (that is, accounts maintained by U.S. citizens or residents) and
  • report these accounts on an annual basis to the Cyprus Tax Authorities, which will in turn forward them to the U.S. Tax Authorities.

From 5 December 2014 (when the IGA came into force), when opening a new account, The Bank requests additional information and documentation from customers to determine

  • whether the account holder is a US person or
  • an entity account holder’s FATCA classification status.

The Bank is also reviewing existing customers (opened prior to 5 December 2014) to identify that US individual accounts and entity accounts are correctly identified in the Bank’s systems and reported where required. In some cases further information and documentation will be requested from customers.

From August 2015, The Bank is required to annually report to Cyprus Tax Authorities information concerning the accounts of US persons, non-compliant account holders and certain US owned entities. It is therefore important that clients respond when requested by the Bank to provide the relevant tax information.

Further information regarding FATCA can be found in the websites of the

In case there are further queries regarding FATCA or local legislation, or FATCA classification, clients are advised to contact a professional tax advisor, as BOC is unable to provide tax advice.

 

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