FATCA Compliance Singapore
In today’s era of globalization, government and financial institutions around the world are coming up with different provisions to combat tax evasion. FATCA compliance in Singapore is one such effective initiative introduces to promote tax compliance and discourage tax evasion. FATCA is intended to increase transparency with respect to US persons investing and earning a part of their income through non-US institutions by requiring US citizens to file yearly reports.
Who is most affected with FATCA Law?
The FATCA Law Singapore it affects tax compliance for a few groups, including:
- US taxpayers holding foreign accounts
- Foreign Financial Institutions (FFIs)
- US financial institutions that are payers to FFIs
The main objective of FATCA tax Singapore is to ‘identify and prevent’ offshore tax avoidance by US citizens or residents. In short, it is an attempt to track US persons earning from other countries and stash assets in other countries. FATCA enables financial institutions to withhold tax if the US citizen didn’t meet its documentation requirement.
How to deal with FATCA?
Hold only those assets with FFIs that are registered with a Global Intermediary Identification Number (GIIN). It will reduce the possibility of US sourced transfers to the account.
Consult with FFI if they will be fulfilling their reporting requirement by submitting the required IRS form 1099, providing detailed account information.
Determine non-reportable foreign held assets such as foreign currency and real estate to gain asset privacy.
Bottom line is that as a US citizen or entity, you can have overseas bank accounts but the need is to properly disclose them to the authority with 100% transparency. To effectively deal with FATCA compliance, you need the expertise of professional who has been at the forefront of tracking developments in FATCA legislation.