FATCA, or the Foreign Account Tax Compliance Act, is legislation enacted by the US Congress which introduced a new reporting and withholding regime designed to combat offshore tax evasion by U.S persons (individuals as well as entities), including the failure to disclose U.S. source income. FATCA is intended to increase transparency so that the IRS will be more readily able to identify instances where U.S. persons may be investing in and earning income through non-US financial institutions.
On 19 December, 2013 Bermuda’s Minister of Finance, on behalf of the Government of Bermuda, signed a Model 2 Intergovernmental Agreement (the IGA) with the United States which implemented a FATCA regime in Bermuda. Although the primary goal of FATCA is one of identification, you should be aware that FATCA imposes a reporting obligation on local financial institutions that have identified real or possible accounts for U.S. Persons or entities that meet certain criteria.
Clarien is committed to being fully FATCA compliant. Please view the impact to customers and additional resources for more information.