Credence Independent Advisors: A Look at FATCA (Foreign Account Tax Compliance Act)

1
A Look at FATCA (Foreign Account Tax Compliance
Act)
Credence Independent Advisors Emaar Boulevard
Plaza, Level 14, Burj Khalifa Downtown, P.O.Box
334155, Dubai, UAE Telephone [phone]
4280 Email info_at_credence-wealth.com http//creden
ce-wealth.com/
Join and Follow us
2

• The United States global tax law Foreign Account
  Tax Compliance Act (FATCA), came into effect on
  1st July 2014.
•  
• The FATCA is at last here after a period of 4
  years, initially developed in 2010 as an approach
  to make Americas corporations and private
  individuals stop evading Americas taxes by
  depositing their money into their accounts in
  foreign countries.
•  
• The act requires foreign banks and foreign
  financial institutions to inform about every
  American who owns an account and even to hold
  back money from those particular clients who are
  suspected of tax evasion to the Internal Revenue
  Service (IRS) in the United States.
•  
• The IRS and Treasury have important FATCA
  projects to complete. The IRS still has to bring
  up to date its withholding agreements for
  Withholding Foreign Trusts and Withholding
  Foreign Partnerships to depict FATCA, which it
  has guaranteed for July. In addition, there are
  numerous areas where the IRS and Treasury still
  have to make alterations as promised to the FATCA
  policies.

3

• For over a year, America has been busy
  negotiating information sharing policy with
  countries around the globe, and up till now,
  77,000 financial institutions and 86 countries
  has registered for FACTA. The countries which
  have already reached official or opening
  agreements with America also include China and
  Russia.
•  
• In spite of the alteration period rules, United
  States and Foreign Financial Institutions
  withholding agents have yet to put up efforts to
  put the FATCA rules as of July 1, 2014 into
  practice. The efforts consist of training
  sessions with employees, instruction manuals and
  modifications to policy manuals that would make
  the workforce aware of the requirement to file
  customers FATCA status on opening accounts.
  Furthermore, the withholding agents of Foreign
  Financial Institutions and United States will be
  made to keep an account of the efforts made in a
  file for trouble-free access. As the IRS agents
  may ask for evidence of a partys efforts in good
  faith to operate in accordance with FATCA.
•  

4

• Lastly, provided that a withholding agent selects
  not to be indulgent regarding FATCA
  documentation, parties should in general consider
  to be required to give the documentation to the
  mediator.
•  
• Collecting tax is one of the most common ways of
  increasing revenue for a nation. FATCA grew out
  of a contentious rule that the citizens of
  America, even if they are permanent residents
  abroad are taxed on their all-inclusive, global
  income despite of where they live. It also helps
  a country to keep check on spending and saving
  capabilities of their citizens.
•  
• Hence, it could be highly important for the
  economic survival of a nation and for the better
  living standards of their citizens. If not
  financially sound, a country risks its citizens
  living in an unsecure environment. Therefore, it
  is important for governments to properly manage
  their tax processes in order to avoid any lack of
  management.
•  

5

• Credence Independent Advisors was born from a
  compelling opportunity in the financial services
  world. In the ever changing dynamic world of
  financial services, it is important for us to
  tailor advice and solutions to individual needs.
  Clients need solutions that make them money and
  preserve their capital and advisors need happy
  clients with increasing wealth under management.
  By harnessing the skills of top quality
  experienced professionals and cutting edge
  technology, we are able to bring what was
  previously only available for multi-million
  dollar clients to a wider reaching client range
  and we have done this independently.