FATCA (Foreign Account Tax Compliance Act) is a US law introduced in March 2010. FATCA focuses on additional information reporting by US taxpayers about certain financial accounts and offshore assets. In addition, financial regulators, governments and banks are also affected. In foreign countries around the world, foreign institutions such as banks are required to report the financial accounts held by US taxpayers if they hold an ownership interest. If banks and individuals do not comply with the requirements, the IRS explains the cost of noncompliance is withholding of payments to account holders.
For US persons, FATCA introduced Form 8938 to disclose certain foreign financial accounts and offshore accounts if the total value is more than certain limitations set by the IRS. Form 8938 is also separate from reporting requirements of FinCEN Form 114 also known as the FBAR (Report of Foreign Bank and Financial Accounts) (previously TD F 90-22.1). These forms require US persons to disclose the highest account balance of their foreign (non US) accounts.
With the latest FATCA regulations taking effect June 30, 2014, banks in Hong Kong have been requesting additional documentation from account holders in order to meet their compliance requirements. US persons may be required to provide a completed Form W-9 to the requesting bank. Banks are also warning customers that accounts could be closed if the requested forms are not provided by the due date.
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The information contained herein serves as a guideline and is only provided for general informational purposes. It should not be considered as offering any tax advice. Since tax laws are complex, you should consult your tax advisor on specific issues related to your tax situation.