1. What is FATCA?
FATCA stands for the Foreign Account Tax Compliance Act. It is a piece of legislation introduced by US Treasury Department and Internal Revenue Service (IRS) to increase income tax reporting by US taxpayers on assets held in offshore accounts and through "Non-US Entities". It adds a new chapter to the Internal Revenue Code aimed at addressing the Tax evasion by U.S. persons using their offshore accounts.
2. What are the FATCA requirements?
The rules require foreign financial institutions to provide the Internal Revenue Service (IRS) with information on certain U.S. persons invested in accounts outside of the U.S. and for certain non-U.S. entities to provide information about any U.S. owners.
3. Is FATCA only applicable to ADIB?
FATCA is a US regulation applicable to all financial institutions and other financial intermediaries globally however their approach to adopting FATCA may be different from one to another as per the type of Institution, Customers Categories and Agreement with IRS.
4. What is FATCA meant to do?
FATCA aims to prevent US persons from using their offshore accounts to avoid US taxation on their financial assets.
5. When was the effective date of FATCA in UAE?
The effective date of FATCA was from July 1st 2014.
6. Does FATCA apply to new accounts or just existing customers?
FATCA applies to all ADIB Group customers, new and existing, depending on the type of account and/or policy held.
7. What is Tax Identification Number ("TIN")?
TIN is an Identification number issued to US persons which is used by the Internal Revenue Service for tax purposes in the United States. It is issued either by the Social Security Administration (Social Security number) or by the IRS.
8. What are the Tax Forms under FATCA?
There are many US tax forms which allow the account holder to declare his status:
- Form W-9 for US specified person; or
- Form W-8BEN for a non-US person with US indicia ; or
- Form W-8BEN-E for Entities with US substantial owners.
9. Who is a specified U.S. person?
A specified U.S. person is any "U.S. person" who is:
- A citizen or resident of the United States,
- A domestic partnership,
- A domestic corporation,
- Any estate other than a foreign estate,
- Any trust if:
- A court with in the United States is able to exercise primary supervision overhead administration of the trust, and
- One or more United States persons have the authority to control all substantial decisions of the trust.
10. What are the indicia's to US Status?
Generally, there is certain information that may lead to broad indications of connections to the US. Like:
- US citizenship of the authorized person
- US citizenship of the owner of the entity
- Local entity established in US
- Form W8BEN for the Authorized person (Non-US Individual with US indicia)
11. Who is a substantial US owner?
A substantial US owner generally refers to a US owner that has a 10% or greater interest in a Passive NFFE. However, where the entity is an investment vehicle, any US owner is considered a substantial US owner.
12. What is Non-Financial Foreign Entity (NFFE)?
A non-financial foreign entity (NFFE) is an entity outside of the United Stated that is not engaged in business as a financial institution. A NFFE is a non-US entity that is not a financial institution.
The following entities are classified as Excepted NFFEs:
13. If I do not agree to submit the documents I have been asked for under FATCA?
- Corporations whose stock is regularly traded on an established securities market,
- Corporations described which members of the same expanded affiliate group,
- Entities organized in certain U.S. Territories,
- Any foreign government, any political sub-division or any wholly owned agency,
- Any international organization or wholly owned agency or instrument thereof,
- Any foreign central bank of issue,
- Any entities wholly owned by exempt beneficial owners.
Failure to provide us with the forms and documents required under FATCA, we will consider you as a recalcitrant customer and may report your accounts to the competent Authorities as per the policy.
14. What is a recalcitrant account holder?
Generally, a recalcitrant account holder is any account holder that:
- Fails to comply with reasonable requests for information necessary to determine if the account is a United States account;
- Fails to provide the name, address, and TIN of each "specified United States person" and of each substantial United States owner of a United States owned foreign entity;
- Fails to provide a waiver allowing disclosure of information to the IRS where such disclosure is otherwise prevented by local law
15. Who will you share my information with?
The UAE has signed an Inter-Government Agreement (IGA) with US, this means that ADIB and other Financial Institutions within UAE to share the required Information related to US reportable accounts with the UAE Central Bank. The UAE Central Bank will then supply the information to the UAE Ministry of Finance instead, who will then supply it to the IRS.
16. How do I access the IRS forms that I need?
You can access the IRS Forms W-8 and W-9 from the IRS website or please visit any one of our branches, or check ADIB website as below.
17. What information ADIB will request Entity to provide and report to local tax authority?
The information provided to the tax authorities the following details:
- Entity Name
- Country of incorporation
- FATCA Status: type and FATCA Status as Active or Passive should be signed and dated by the authorized person.
- Address of entity
18. Will ADIB respect my data privacy?
ADIB is subject to Strict confidentiality requirements and data safeguards as outlined under local law. As per regulatory requirements, the information will be shared with the concerned -tax authorities.
19. If I have an existing relationship with another branch of Abu Dhabi Islamic Bank in a different jurisdiction, shall I provide separate FATCA IRS forms for each branch?
Yes, A separate form will be required for each branch