Do you know what the FATCA law is ?

The FATCA law (Foreign Account Tax Compliance Act), in force since 2013, was created by the United States government to control tax evasion regarding citizens of this country and residents who have money or funds deposited in Financial Institutions of other countries. Let us remind you that anyone who has a link with American nationality is globally obliged to pay American Federal taxes, regardless of their place of residence, the origin of their income, whether or not they have nationality in other countries.

The intent is to prevent American taxpayers from using financial accounts outside the United States in order to evade taxes.

In order to have access to said information, foreign banks must report to the United States the Financial Information of their clients who have the requirement of residence or citizenship of the United States, informing the IRS about the information related to the accounts and financial products. of these people.

Financial institutions that do not report such information, the law anticipates that transfers of income or other financial concepts from abroad will be subject to a 30% withholding and in turn a possible suspension to do business in the United States.

Financial Institutions must register on the FATCA list administered by the IRS to obtain the GIIN, Global Intermediary Identification Number.

For American individuals with these specifications, they must fill out form 8938 to declare their financial assets abroad and determine if they exceed the information threshold in accordance with the regulations .

This form must be filed together with the Federal Tax Forms (1040-NR, 1040, 1065 or 1120) during the deadlines established by the IRS for its return.

Depending on the type of Taxpayer, it will be the declaration threshold and it will be taken into consideration depending on the civil status of the citizen.

For more information visit the IRS website.