The Foreign Account Tax Compliance Act (FATCA) targets U.S. taxpayers who are non-compliant with foreign accounts, in an attempt to deter US citizens from hiding money outside of the county. The main objective of FATCA is the proper documentation and reporting of foreign financial accounts and offshore assets. Under the law, all U.S. taxpayers must report certain foreign financial accounts and offshore assets when filing Form 8939 in addition to FBAR reporting. These rules not only impact the financial services sector, but also affect any other entities with operations both in and outside of the United States.
Because the rules of FATCA are complex, complying with this law can be challenging to most businesses. Analyzing the legal structures, preparing withholdings certificates, evaluating controls and performing due diligence of preexisting accounts, just to name a few, can be daunting tasks. As such, many international clients turn to an outside advisor to help avoid the harsh tax penalty that comes along with lack of compliance.
It’s important to work with a qualified advisor who understands the ins and outs of FATCA to help you remain compliant.
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