Fatca regulation: the most relevant aspects

FATCA (acronym for Foreign Account Tax Compliance Act) it’s a regulation published on the 18th of March by the USA Government, to face tax evasion’s phenomenon.

It requires Foreign Financial Institutions to deal with precise agreements, called “FATCA agreements”, along with the USA Internal Revenue Service (IRS). FACTA establishes the duty of the identification of US persons, and the providing of financial and personal information to the IRS.

“US persons”, in particular, is a huge category which includes all persons that are US’citizens (even if they live abroad, or own another citizenship), or foreigners living or placed in US field, and in some cases even persons who are not US citizens but that manage relationships with US person or Companies abroad.

The general rules of FATCA provide for foreigneirs Insitutitions to identify properly and in a suitable way the new customers, US persons, once they create a new relationship with them, involving FACTA interests, and in add to check deeply old customers to verify, with special due diligence’s procedures, if they could be considered as US persons.

In this last case, according with the first step of that due diligence procedure, old customers should be divided into two different categories, depending on the amount of their assets: in fact, if the asset is higher than 1.000.000. dollars(Lower value account) Institutions have to check them only if elements exists that suggests they have US citizenship.

On the other way round, If customers has higher value accounts, Insitutions should engage an inquiry covering at least the last five years, and moroever make a new inquiry per year.

In Italy in particular doesn ‘t exists the obligation for Financial Institutions to sign the FATCA agreement with the IRS, because it has been published an InterGovernmental Agreement, whic has adopted inside the Country the FATCA Regulation, with semplifiy misures. Those misures requires Financial Institutions to comply with the internal regulations following this InterGovernmental Agreement.

A similar and important procedure being in force in Italy (regarding internal interests) is the so called “Voluntary disclosure”, which consists in the possibility for citizens who own assets or has made investments in an illegal way, both in Italy or abroad, to denounce themselves, to avoid too mutch  heavy punishment.