Under FATCA, U.S. citizens or U.S. tax residents, with specified foreign financial assets that exceed certain thresholds, must report those assets to the United States Internal Revenue Service (IRS), whether they live in the U.S. or not.
Who FATCA applies to
FATCA requires foreign financial institutions (ie, financial institutions outside the U.S.) that are not exempted, to register and report to the IRS on details of financial accounts held by:
- U.S. citizens
- U.S. tax residents
- U.S. entities that are specified U.S. persons
certain non-U.S. entities that are controlled by U.S. tax residents or U.S. citizens, and certain financial institutions that are “non-participating”.
Unless the U.S. exempts them from FATCA Reporting, this includes foreign financial institutions such as:
- insurance companies
- custodial institutions
- hedge funds
- mutual funds
- superannuation funds, and
- private equity firms.