Have you got your foreign account FATCA law compliant? If not then be ready to face its repercussions. All US citizens must adhere to global tax compliance systems for their foreign accounts. One of the most important sets of rules is outlined within the FATCA law in Singapore for US citizens. To identify and reduce tax evasion matters, it is mandatory for US citizens to annually prepare a report of their assets held in foreign bank accounts.
To prevent tax evasion, Foreign Account Tax Compliance Act (FATCA) law has been introduced in 2010. The act requires certain financial institutions to report details of financial accounts held by US taxpayers to the IRS i.e. Internal Revenue Service. These financial institutions are also required to report the details of tax evasion. A financial institution has the authority to withhold tax if an individual does not comply with any documentation requirements.
Motive of FATCA
FATCA aims to bring in transparency and prevent evasion of tax by monitoring the income earned by NRIs or expats living in Singapore.
Ideal Solution For FATCA Compliance In Singapore
- Determine your FATCA liability status- In order to remain compliant, avoid additional penalties, or eliminate the possibility of an IRS audit, firstly you need to determine whether you’re under the obligation to file FATCA reports. For individuals and business entities, check whether you are required to file a US federal income tax return. It is essential to keep mandatory reporting requirements in mind for FATCA compliance in Singapore.
- FATCA Threshold- Secondly, you or your company must need to ensure that all the income held by foreign, FATCA banks in Singapore is tracked and reported accurately if exceeded the FATCA threshold. Also, make sure that all the essential documentation is furnished to the IRS.
The details of FATCA can be filed using a self certification form available on the mutual fund company’s website, service centers, or Asset Management Companies (AMCs). You can use both online and offline mode to submit your details of FATCA tax in Singapore in order to avoid future legal complications.
Next on the line is, generates reports for each FATCA reportable account, as per the requirements of IRS or Singapore’s tax authority guideline.
List of documentation needs to submit to be FATCA compliant and how it can be done
Documentation- FATCA compliance in Singapore simply requires a declaration mentioning information such as PAN details, place of birth (with country name), country of residence, occupation, nationality, details of your gross annual income, and details of whether you are a politically exposed US citizen. Fulfilling such documentation requirements is mandatory both for individual and non-individual investors. However, if you have paid tax in any other country apart from Singapore, there is also a need to provide the tax identification number.
Create an initial management framework by classifying all of their entities and assets, according to the FATCA requirements. The purpose is to establish a permanent database for information storage, which can be easily managed from different locations.
Stay FATCA Compliant With The Right Assistance
Trying to stay updated with the ever-changing nature of Singapore FATCA law reporting, is not an easy task. This is why many US citizens leverage the expertise of FATCA reporting professionals to ensure proper entity management and FATCA compliance as per the law.
Professional tax expert in Singapore contains a FATCA management module to establish a strong framework for compliance with FATCA in Singapore. For reliable guidance, you can seek the assistance of a FATCA reporting professional and protect your Foreign accounts from freezing.