Foreign Account Tax Compliance Act Policy
Foreign Account Tax Compliance Act (“FATCA”) is a legislation introduced by the United States comes into effect from 01 July 2014. It is intended to increase tax transparency for the US Internal Revenue Service (IRS) with respect to US persons who hold assets overseas. Many Governments around the world has signed or are expected to sign Inter-governmental agreement (IGA) with the US government.
Singapore Government has signed a Model 1 Intergovernmental Agreement with the US Government to implement FATCA in Singapore on 9 December 2014 (hereinafter referred to as “Singapore IGA”). Under this agreement, all banks and FIs (such as Lion Trust (Singapore) Limited (“Liontrust”)) in Singapore are to report FATCA-related information to the Inland Revenue Authority of Singapore (IRAS) which will then forward the information to the US IRS.
For countries that enter into Model 2 IGA, the banks and financial institutions (FIs) outside US are required to report bank account information on their US customers to US IRS directly.
Liontrust is FATCA Compliant
As a responsible financial institution, Liontrusthas taken several measures towards becoming FATCA compliant. Liontrust has obtained the relevant Global Intermediary Identification Numbers (GIIN) and these numbers are published under the IRS portal. Other measures taken by Liontrust include implementing procedures for onboarding on new clients and reviewing its existing relationship as required under the Singapore IGA. All new clients will be asked for their FATCA classification.
For existing clients, we may be contacting you to request further information or documentation in order to verify your tax status under FATCA. It is important that you respond to all requests. If you have any queries regarding FATCA or the Singapore IGA or relevant local legislations and your tax position, please contact a professional tax advisor, as Liontrust is unable to provide tax advice.
While Liontrustis not permitted to offer advice in relation to FATCA, we would be pleased to assist in engaging proper advisors in this respect for our clients. Customers may also visit the US IRS website to obtain the latest relevant forms and information on FATCA. We can assist our clients with their classification and registration obligations in order to achieve FATCA compliance.
For information on the Singapore IGAs relating to FATCA and how it affects you, please see the FAQ attached.
Reporting by Liontrust
For the purpose of complying with FATCA, Liontrust will be required to report and disclose information of accounts or our customers that are US personsto our Singapore relevant authorities as required under the Singapore IGA. The requirement to provide such information to the IRAS is continuous and on periodic basis
Reporting Obligations on you
You shall notify us in writing immediately (and in any event no later than 30 days from the date of change) if you are or become a U.S. Person. You are also required to provide us with such information, documents and assistance as we may require upon request.
You are deemed to have consented to the reporting and disclosure of any information relating to you and your account as may be required under the Singapore IGA.
Failure to report
With effect from 1 July 2014, we may exit the relationship with you if:
- you refuse or fail to provide in a timely manner any information or documents or other assistance as may be requested by us;
- you withdraw your consent to the reporting and disclosure of any information or documents relating to you as may be required under Singapore IGA; or
it is, in our opinion, required for the purpose of complying with the IGA entered into between the U.S. and Singapore and regulations implemented as part of such IGA).
Notwithstanding any other terms and conditions that govern your relationship with us (including but not limited to amendments or modification provisions of such terms and conditions), we may amend, update, and revise this FATCA Policy unilaterally at any time as may be required by us to ensure its compliance with applicable laws and regulations.
We have prepared a frequently asked questions (FAQ) relating to the Singapore IGA arrangement and Liontrust obligation under this Singapore IGA. A copy is attached for your information. This letter and the FAQ does not constitute as legal or tax advice to you related to FATCA as we are not capable of providing such advice. You should consult a legal or tax advice on your personal circumstances and obligation towards FATCA
1. What is FATCA?
FATCA or Foreign Account Tax Compliance Act is a legislation introduced by the US in 2010. It is intended to increase tax transparency for the US Internal Revenue Service (IRS) withrespect to US persons who hold assets overseas.
Many Governments around the world has signed or are expected to sign Inter-governmental agreement (IGA) with the US government. These IGAs, will result in the FATCA legislation becoming part of these countries’ local laws including Singapore.Banks and financial institutions (FIs) outside US are required to report bank accountinformation on their US customers to US IRS.
2. FATCA Implementation by Singapore Government
FATCA legislation became effective on 01 July 2014. Singapore has signed a Model 1 Intergovernmental Agreement (IGA) with the US to implement FATCA in Singapore on 9 December 2014. Under this agreement, all financial institutions (including Lion Trust (Singapore) Limited (“Liontrust”)) in Singapore are to report FATCA-related information to the Inland Revenue Authority of Singapore (IRAS) which will then forward the information to the US IRS.
3. How are Customers (of Lion Trust (Singapore) Limited) Affected by FATCA
All customers of Liontrust who are classified as “US persons” or have US-links will be affected by this legislation.
– The term ‘US person’ includes but not limited to means:
- A citizen of the US, including an individual born in the US but resident in another country (who has not given up their US citizenship)
- A person residing in the US, including US green card holders
- A person who spend a significant number of days in the US each year
- A partnership or corporation organized in the U.S. or under the laws of the U.S. or any State thereof,
- A trust if (i) a court within the U.S. would have authority under applicable law to render orders or judgments concerning substantially all issues regarding administration of the trust, and (ii) one or more U.S. persons have the authority to control all substantial decisions of the trust, or an estate or a decedent that is a citizen or resident of the United States;
– US links includes
- Designation of the account holder as US citizen or resident;
- US place of birth;
- US residence address or US mailing address (including US post office box);
- US telephone number;
- Standing instructions to pay amounts from the account to an account maintained in the US;
- Current power of attorney or signatory authority granted to a person with a US address; or
- An “in-care-of” address or a “hold mail” address that is the sole address the FFI has identified for the account holder
4. What does FATCA means to you?
As a US Person
If you are considered a US Person, you may be asked to supply to Liontrust with additional information/documentation. You may also wish to visit the IRS website to determine if you need to complete and submit any additional IRS forms.
Liontrustwill be required to report information about you andyour account to the local tax authority or the IRS (depending on the relevant countries adoption of FATCA model) onan annual basis.
As a non US Person
For most customers who are non-US Person, FATCA will have minimal impact, and there will be no action required. However, Liontrust may still contact you to confirm your status as a non-US person if we have reason to believe you are potentially a US person for FATCA purposes.
5. How frequently does customer have to provide information for FATCA purposes?
FATCA is an ongoing process. If your account informationchanges, Liontrustmay be required to contact you to obtainadditional information so that we are able to update youraccount classification under FATCA.
6. What does Lion Trust (Singapore) Limited have to do to comply with FATCA?
Liontrust (Singapore) Limited will be required to identify accounts with US links as indicated in paragraph3 above and confirm with these account holders their US tax residency status through a self-certification form (such as W8 and W9 forms) and collection of supporting documents (such as passports, residential address or relevant evidence of residency / nationality).
Accounts shall include trusts and companies interposed under the trust and also standalone companies where Liontrust administers or provide services to.Account holders who are confirmed as US persons will have their account information submitted to the IRAS or US IRS (depending on the IGAs).
For entities (e.g. companies or trusts) that fall under the category as Financial Institution as defined under the Singapore IGA,Liontrust is required to report debt or equity interest held by Settlor (or Grantor) and beneficiaries.
For entities (e.g. companies or trusts) that fall under the category as non-Financial Institution or defined as Non-Financial Foreign Entity (“NFFE”) under the Singapore GIA,Liontrustis required to report the Controlling Persons. Controlling Persons is defined as substantial shareholderor effective controllers of the entityand may include settlor, the trustees, the protector (if any), the beneficiaries or class of beneficiaries, and any other natural person exercising ultimate effective control over the entity/trust.
No further action will be taken on account holders who are confirmed non-US persons.
7. Customers Who Fail to Comply with FATCA Requirements
Customers with US links who fail to submit the necessary form and documents may have their accounts treated as a US Reportable Account and Liontrust, under the IGA arrangement, will report it to IRAS. In addition, all US proceeds (which may include pass-thru funds) may be subject to 30% tax withhold by Liontrust.
In accordance with FATCA, Liontrust may exit the relationship with customers who decide not to provide the necessary information and documentation.For new accounts, Liontrust will not be able to establish any relationship with the customer.
8. What information is reported to the IRAS?
The information to be reported to the IRAS includes the account holder’s name, address, US Taxpayer Identification Number, account number, account balance and amount for distribution.
9. Obtaining Advice on FATCA by Customers
Liontrust cannot offer any advice relating to FATCA. We recommend you seek professional tax advisor to discuss your personal tax situation or refer to the US IRS website
A beneficiary that is entitled to a mandatory distribution (either directly or indirectly) from the trust; or a beneficiary that receives a discretionary distribution (either directly or indirectly) from the trust in the calendar year.