Foreign Account Tax Compliance Act
What is FATCA?
The Foreign Account Tax Compliance Act (“FATCA”) was enacted by United States (“US”) in March 2010 to target non-compliance with US tax laws by US persons using foreign accounts. FATCA is intended to increase transparency with respect to US persons investing and earning income through non-US institutions by requiring US persons to file yearly reports on their non-US financials.
Following the signing of the Intergovernmental Agreement by Singapore and US in 2014, the revised Regulations on the Income Tax Act was issued on 17 March 2016. Non-US (foreign) financial institutions (FFIs), including Etiqa Insurance Pte. Ltd. (“Etiqa”), are required to report on assets and identities of such persons base on indicia used to identify US person-status.
FATCA imposes tax withholding where the applicable documentation and reporting requirements are not met.
Who is affected?
The FATCA affects all Etiqa customers (Individuals and Entities), but the extent of impact depends on:
• the type of insurance policy(ies) you have with us
• your tax residency, i.e. where you live or operate as a business
If you have any questions regarding your tax residency, please refer to the rules governing tax residence that have been published by each national tax authority on the Organisation for Economic Cooperation and Development (“OECD”) website (http://www.oecd.org/tax/automatic-exchange/crs-implementation-and-assistance/tax-identification-numbers/). You may also wish to consult your tax advisor if you require any tax advice or assistance in completion of FATCA declaration.
How does FATCA affect you?
Etiqa Customers shall have to provide a declaration on US tax residency statuses. US persons shall have to complete a Form W-9 / Form W-8BEN / Form W-8BENE. You may also be required to furnish additional information and supporting documents.
You shall inform us where there are changes in circumstances that may impact your tax residency(ies). If you require Form W-9 / Form W-8BEN / Form W-8BENE forms, you may obtain it from your Financial Adviser Representative or US IRS website (www.irs.gov).
You shall ensure that the information provided is complete and accurate. Etiqa assumes no responsibility for the independent verification of any information provided on FATCA declarations and will rely on such information as being complete and accurate in all material respects. Etiqa is also under no obligation to accept FATCA declarations if we have either reason to know, believe or have actual knowledge that the information provided is invalid or incorrect. Etiqa, when requesting for FATCA declaration, will operate under the regulations applicable to its local tax jurisdiction or country where the Account Holder is located, if applicable.
The term “US person” means:
• A US citizen or resident individual
• A partnership or corporation organized in the United States or under the laws of the United States or any State thereof
• A trust if a court within the United States would have authority under applicable law to render orders or judgments concerning substantially all issues regarding administration of the trust, and one or more US persons have the authority to control all substantial decisions of the trust
• An estate of a decedent that is a citizen or resident of the United States
The term “US Indicia” means:
• Identification of the Account Holder as a U.S. citizen or resident
• Unambiguous indication of a U.S. place of birth
• Current US mailing or residence address (including a U.S. post office box)
• Current US telephone number
• Standing instructions to transfer funds to an account maintained in the United States
• Effective power of attorney or signatory authority granted to a person with a US address
• An “in-care-of” or “hold mail” address that is the sole address the Reporting Singaporean Financial Institution has on file for the Account Holder
An account is reportable if it is held by one or more US persons or a non-US entity that is controlled by specified US persons. An account holder is reportable if the person named as the owner or the beneficiary entitled to receive future payments from a cash value insurance is a US persons.
For more information on FATCA, please visit the US FATCA website (https://www.irs.gov).
Common Reportable Standard
The Common Reporting Standard (“CRS”) and FATCA are both tax initiatives introduced to reduce tax evasion and improve tax transparency and accountability. While both the CRS and FATCA might require similar information from customers, additional information might still be requested under the CRS even if you have already provided information under FATCA.
The CRS is an internationally agreed standard for regular exchange of financial account information between jurisdictions, with the objective of detecting and deterring tax evasion by taxpayers. Under the CRS, Singapore based financial institutions, including EIPL, are required to establish the tax residence(s) of all customers. Depending on the type of insurance policy(ies) held with EIPL, customers would be required to provide information and supporting documents on tax residency, which would be submitted to IRAS for transmission to tax authorities in other jurisdictions under the various bilateral exchange agreements.
For more information on CRS, please click here.
Information is accurate as at 3 March 2017.