General Information on FATCA for Artsakhbank CJSC Clients and Partners
What is FATCA?
FATCA (Foreign Account Tax Compliant Act) is a U.S. federal law requiring all non-U.S. foreign financial institutions to provide their records relating clients of the US tax residents to the U.S. Internal Revenue Service (IRS).
The main purpose of FATCA law is to prevent tax evasion of the U.S. taxpayers by investing their funds in foreign or offshore financial institutions, and by periodically receiving reports of these financial institutions, providing information on the U.S. taxpayers’ accounts or the financial accounts of the companies, whose significant shareholders is the U.S. taxpayers.
The Republic of Armenia has given its consent to cooperate with the U.S. Internal Revenue Service regarding FATCA implementation under the Cooperation Model 2, which implies conclusion of an intergovernmental agreement with the USA.
Under FATCA, Artsakhbank CJSC has been given the following Global Intermediary Identification Number (GIIN): 2ZQY7E.99999.SL.051:
Functions of the Bank under FATCA
To investigate individuals (inclusive of SE) and legal entities for being the U.S. taxpayer, the Bank collects addition information from the Client.
The Bank provides the following:
Verification of the current and newly opened accounts.
Identification of individuals and legal entities.
Tax payment in cases specified by FATCA
• Submission of annual reports to IRS.
The U.S. Tax Resident Criteria
The U.S. taxpayer-individual (SE incl.) is a citizen of the USA or a U.S. tax resident.
The Client of the Bank considers as the USA tax resident, if meets one of the following criteria:
Born in the USA
Resident of the USA or a green card holder (Green Card) with permission to permanent residence.
Physically has been present in the USA at least 31 days within the current year and 183 days within the last 3 years (the current year and the previous 2 years, whereas taking into account all days spent in the USA in the current year, 1/3 of the days within the previous year, and 1/6 of the days spent 2 years before the current year.
For example, in 2015, you spent 130 days in the USA; in 2014 you spent 120 days, and 120 days in 2013. So far, in total you spent 190 days (130 + 120*1/3 +120*1/6). As total number of days spent is over 183 and number of days within the current year prevails 31, then you are considered to be the USA tax resident in 2015.
The U.S. tax resident legal person considers as the U.S. taxpayer-legal entity, if meets one of the following criteria:
Registered in the USA (has been founded in compliance with the U.S. legislation)
The Founder/founders holds at least 10% of the company shares and meets on of the aforementioned requirements.
Other requirements under FATCA.
Regarding «the U.S. persons»:
In cases and in the manner prescribed under the U.S. FATCA, the Bank has the right to provide the U.S. IRS with the information on the Bank Client, who meets provisions of the current law, in the form of reporting set by the law.
The Client is responsible to know provisions of FATCA, as well as for being acquainted with procedure of providing by the Bank the report on the USA citizens, the U.S. residents, and persons having the U.S. residence permit, on tax deductions from some of the revenues and the U.S. legislation requirements to him/her as the U.S. person.
While receiving the status of the U.S. person in the future, the Client is obliged to inform (notify) the Bank on it in written form within 30 days maximum. :
The Client commits not to dispute any action of the Bank performed under FATCA requirements and discharges the Bank from any claim regarding the measures taken by the Bank in pursuance of FATCA.
Recalcitrant accounts are the Clients, which refuse to submit to the Bank the information on the bases of which the Bank will disclose their indicia of the U.S. taxpayer or refuse that the Bank will report to the IRS any information on them, their accounts and revenues. Recalcitrant accounts are subject to 30% tax on revenues of the U.S. origin (interest payment, shares, rental payments, royalties, salary, annuities, profit and other income, accumulated as a result of doing business or commerce in the USA or effectively connected to such business or commerce).