FATCA

Foreign Account Tax Compliance Act regulation.

Definition

FATCA (Foreign Account Tax Compliance Act) is a 2010 US law requiring Foreign Financial Institutions (FFI) to sign an agreement with the IRS and report annually the accounts held directly or indirectly by US persons. Standardised reporting format (FATCA XML Schema v2.0). Without agreement, 30% withholding tax on US income.

Origin

Adopted by Congress in the HIRE Act (March 2010). IGA (Intergovernmental Agreement) Model 1 / Model 2 signed with 113 jurisdictions.

Example in context

A French bank sends its FATCA XML file to DGFiP which transmits to the IRS via the IGA Model 1.

Related terms

• CRS — OECD counterpart.