Compliance & Regulation

End-July FATCA deadline looms for foreign banks

Foreign financial institutions (FFIs) in Asia risk losing their FACTA Participating FFI status if they do not renew their agreements with the US Internal Revenue Service (IRS) by 31 July.

This is according to tax specialist Buzzacott, which said that any non-US financial institution that entered into an agreement before 2017 must renew the arrangement to continue reporting on tax-relevant information about clients who are US citizens or Green Card holders. 

The reporting requirement, which includes details on the names, addresses and account balances of US citizens, was enacted in 2010 to tackle the issue of nearly USD400 billion of US tax revenue being lost every year to tax evasion.

With a high concentration of US expatriates in Hong Kong and Singapore, Buzzacott said that the IRS has focused its attention on encouraging financial institutions in the two cities to comply with its tax reporting requirements. 

As a result, the firm added that next 10 days are a crucial window for private banks and private wealth managers in Asia who need to update their agreements accordingly.