Foreign Account Tax Compliance Act
The Foreign Account Tax Compliance Act (FATCA) was signed into U.S. law in March 2010. Its aim is to prevent U.S. taxpayers from using accounts held outside of the U.S. to evade taxes.
FATCA and, in some countries, related local regulations will require financial institutions to report annually on specified accounts held outside of the U.S. by U.S. taxpayers. This reporting will be made available to the U.S. Internal Revenue Service either directly or through local regulatory agencies.
Any financial institution that fails to comply with FATCA will face a 30% withholding tax on a wide range of U.S. sourced payments to its clients. In addition, countries that pass regulations supporting FATCA will enforce those regulations through their own regulatory agencies.
What does this mean to Scotiabank and our customers?
The Scotiabank Group has always been committed to keeping clients' personal information accurate, confidential, secure, and private. In every jurisdiction, our response to FATCA will be held to our standard of strict compliance with local privacy rules, and our approach will reflect our longstanding commitment to client privacy and client service.
We expect FATCA to have no impact on the vast majority of our clients
In any case where we determine that a specific personal or non-personal account may be affected by FATCA, we will:
- contact the account holder to explain why the account may be affected; and then
- work with the client to ensure that the situation is handled correctly.
FATCA Compliance and Registration
Across our entire global network, Scotiabank intends to meet all obligations imposed under FATCA in accordance with local banking and tax regulations.
- In countries where FATCA is integrated into local banking and tax regulations under an intergovernmental agreement (IGA) with the U.S., Scotiabank intends to meet all resulting legal obligations.
- In countries where FATCA is not integrated into local banking and tax regulations under an IGA, we intend to comply with FATCA while maintaining strict adherence to existing local banking and tax regulations.
- In countries where the direct reporting to the IRS called for under FATCA is not permitted by local law, we will resolve the issue in a way that does not compromise Scotiabank’s overall status under FATCA.
Scotiabank has now registered all Scotiabank legal entities that are classified as FFIs.
When does this come into effect?
FATCA came into effect in stages, beginning on July 1, 2014.
How can I stay informed?
As information on new developments is released, we will keep you informed by posting updates on our website.