FATCA imposes certain due diligence and reporting obligations on foreign (that is, non-U.S.) Financial Institutions, notably the obligation to report U.S. citizen or U.S. tax-resident Account Holders to the U.S. Internal Revenue Service (IRS). Failure to comply with FATCA’s requirements will expose such Financial Institutions to a 30 per cent U.S. withholding tax on payments to them from U.S. sources.
On 28 April 2014, Australia and the U.S. signed an intergovernmental agreement to implement FATCA (the FATCA Agreement). A key objective of the FATCA Agreement is to facilitate Australia’s compliance with FATCA to reduce its overall burden on the Australian financial industry and the broader community.
Under the FATCA Agreement, Australian Financial Institutions (AFIs) do not report information directly to the IRS. Instead, they report to the Australian Taxation Office (ATO) and the information is made available to the IRS, in compliance with Australian privacy laws, under existing rules and safeguards in the Australia-U.S. Convention for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to taxes on income (the Convention).
Here are some key links:
- Australian Taxation Office (ATO)
- Australian FATCA
- IRS and Australian FATCA IGA Agreement
- IRS FATCA
- IRS FATCA – Foreign Institution
- target=”_blank”>Australia FATCA Software