FATCA: Key Action Steps Required by Funds for FATCA Compliance

FATCA: Key Action Steps Required by Funds for FAT...

The Foreign Account Tax Compliance Act (FATCA) is a complex reporting and withholding regime enacted with a goal of achieving greater tax transparency by enforcing disclosure by certain non-US entities of US persons’ offshore accounts, investments, and income.


Related content

FATCA: Key Action Steps Required by Funds for FATCA Compliance

FATCA generally imposes a 30 percent withholding tax as a penalty on certain US source payments (e.g., dividends and interest) received by certain non-US entities after 30 June 2014 if disclosure and other requirements are not satisfied by such non-US payees. The FATCA regime classifies non-US entities under two broad categories: “Foreign Financial Institutions” (FFIs) and “Non-Foreign Financial Entities” (NFFEs). The definition of an FFI is very broad and captures most funds. As such, a fund and certain non-US entities in its affiliated group (e.g., the fund’s general partner and the fund’s manager) may be classified as FFIs. Each FFI in a fund’s affiliated group generally will be required to register with the IRS by 25 April 2014. Certain key action steps are required for funds to be compliant with FATCA.

© 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.

Connect with us

KPMG's new digital platform

KPMG International has created a state of the art digital platform that enhances your experience, optimized to discover new and related content.