FATCA and CRS Regulations
We have previously communicated with all clients who were with us as at 1 March 2015 about the Foreign Account Tax Compliance Act (FATCA). FATCA is an American law which requires offshore financial institutions, who have American clients, to report certain information about those clients to the American tax Authority, the Internal Revenue Services (IRS).
The purpose of FATCA is to prevent American tax payers from avoiding tax through the use of offshore investment vehicles. FATCA affects all STANLIB clients who are American citizens.
From 1 March 2016, new regulations have been introduced which now require financial institutions to report on all foreigner nationals to the South African Revenue Services (SARS). These regulations were introduced by the Organisation for Economic Cooperation and Development (OECD) and have introduced a Common Reporting Standard (CRS). CRS is a standard containing rules about who to report, what to report and the format of the reporting.
FATCA and CRS are Automatic Exchange of Information standards (“AEIS”). The information collected for FATCA and for CRS is similar, the principal difference is that FATCA information is collected about Americans and CRS information is collected about all people who have tax residency outside of South Africa.
The AEIS require that we identify new and existing foreign persons and entities who are clients and controlling persons of those entities in certain circumstances and report certain information to SARS who will in turn report the information to the relevant country’s tax authority.
Not all the information we are required to report on is available on our existing records, for existing clients, because before the AEIS it was not part of our process to collect such information. As such, with the introduction of FATCA, we also had to introduce self-certification forms to collect the additional reportable information. With the introduction of CRS, we have updated the FATCA form to collect the CRS related information.
Should you require further information about FATCA click here(FATCA FAQ).
Should you require more information about CRS, click here (CRS FAQ).