The Foreign Account Tax Compliance Act ("FATCA") is a law that is intended to target tax non-compliance by U.S. taxpayers with foreign accounts. FATCA focuses on reporting:
FATCA requires that SVB:
FATCA also requires FFI's headquartered outside the U.S. to register with the IRS to be compliant and not be subject to mandatory withholding on U.S. sourced income such as interest and dividends.
Non-Financial Foreign entities (NFFE's) must disclose the identity of U.S. owners or certify non-US ownership to the withholding agent beginning in July 2014. This includes venture firms with foreign LPs and/or foreign limited partnerships which must register with the IRS or be subject to withholding of 30% on income, which may include any proceeds from the liquidation of fund investments.
SVB is in the process of conducting FATCA due diligence which includes collecting and reviewing account holder information and documentation, so that an account can be classified as a U.S. or a non-U.S. account. We are relying on the information and documentation previously provided by our clients to complete this effort. However, to ensure SVB client accounts have been properly classified under the FATCA regulations, clients may be requested to provide additional information. This may include having to provide a new W-8 or W-9 form.
To prepare for FATCA we recommend that clients:
Familiarize yourself with the final IRS regulations under FATCA.
Consult with your legal and/or tax advisors to assess legal entity classifications, business activities, sources of income and internal policies and procedures to understand the impact FATCA will have on your organization;
Here are some suggestions to assist you in completing the appropriate Form W-8 for your organization:
Please consult with your tax and/or legal adviser for any questions specific to your company in completing your Form W-8.
For any general account questions related to FATCA please call your Relationship Manager.
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