FATCA – Which dates will be important this year?

Almost one year has passed since FATCA came into effect in Sweden and the reporting requirements are now being defined and strengthened. Following is a summary of the regulations and the dates which can be important for you to note during the year.

Brief details about FATCA

FATCA is, orginally, U.S. legislation which, due to an agreement between Sweden and the U.S., has been adopted into Swedish law. The regulations require that financial institutes send in details on certain natural persons’ and legal entities’ accounts to the Swedish Tax Agency which, then, passses on these details to the U.S. tax authorities, the IRS.

• Financial institutes are to report statements of earnings and deductions on so-called ”U.S. Persons”, that is on:
• Natural persons who are U.S. citizens or other natural persons having their domicile in the U.S. Note that the U.S. definition of domicile is broad.
• Legal entities who, due to their domicile, location of company management, location of incorporation or other similar circumstances, can be seen to have their domicile in the U.S.

Which financial institutes are to present statements of earnings and deductions to the Tax Agency on the basis of FATCA?

• Banks
• Credit institutes
• Fund companies
• Insurance companies
• Risk capital companies

Note that certain financial institutes are exempt, for example, pension foundations and profit sharing plans.

What are the important dates during the year

• 15 May: Statement of earnings and deductions for calendar year 2015 is to be presented to the Tax Agency for accounts identified no later than 30 September 2015.
• 30 June: The financial institutes are to have completed their assessment of so-called low value accounts, that is, accounts with a total balance of USD 1 million or less.
• 31 July: Statements of earnings and deductions are to be presented to the Tax Agency for calendar year 2015 for accounts which have been identified after 30 September 2015. If the account was opened on 1 July 2014 or later, then the statement of earnings and deductions is also to be presented for that calendar year.
• 30 September: The Tax Agency is to provide the IRS with the details.

What is a statement of earnings and deduction?

• The identification details of the account.
• The balance of the account or the value at the end of the year. If the account was closed during the year, the details regarding the balance or value immediately prior to the account being closed should be reported.
• The individual’s U.S. tax registration number (TIN), if there is one. If there are no such details, the statement on earnings and deductions can, instead, include such details as birth date. If the account is held by a company (unit), the names of the individuals for whom the statements of earnings and deductions are being reported should also be provided. This can be both a natural person with controlling influence over a passive, non-financial unit who is the account holder of the account incurring the reporting obligation, and/or it can be the account holder of the account incurring the reporting obligation.

If you need help in dealing with FATCA requirements for natural persons and legal entities, you are more than welcome to contact us.