Foreign Account Tax Compliance Act (FATCA) requirements

FATCA (The US Foreign Account Tax Compliance Act) is a set of legislative measures adopted in March 2010 by the United States of America (USA) in order to prevent and reduce tax evasion generated by cross-border activity of American residents through tax avoidance by American taxpayers, using accounts with financial institutions outside the US or offshore type of investment instruments.

Under FATCA requirements, outside the US financial institutions should: identify and obtain information about customers who may be classified as US customers, based on specific criteria, known as “US indicia”.

This information is necessary to determine which US customers are reported. BCR Chisinau S.A. is registered at IRS with FATCA status. FATCA requirements were applied starting with July 1, 2014 to US customers (individuals or legal entities controlled by US citizens), whether located inside or outside the US.

The US signs (US indicia) are information provided by customers that may lead to classifying an individual or legal person owned/controlled by a shareholder/beneficial owner as a US person.

It is considered a US person if the person:

  • is a US citizen;
  • is US permanent resident;
  • holds Green Card issued by US authorities.

Identifying one of these signs does not lead to immediate classification as a US person, but requires confirmation of the information by submitting documents at the request of the bank.

The documents are presented in a reasonable time, also communicated by the bank.

For more information please consult the website to check the status of US Person and/or US resident for tax purposes.

Non‐Financial Foreign Entity („NFFE”) is a legal entity outside the US that is not a financial institution. There are two categories of NFFE:

  1. Active NFFE are entities involved in transactions or business assets (manufacturing, industry, non-financial services, etc.) where less than 50% of gross income in the previous calendar year is passive. This is a FATCA status. F.i. a sausage factory that has no income other than that from this activity;
  2. Passive NFFE are entities that register a passive income exceeding 50% of gross income (such as dividends, interest, rents, annuities). This is a FATCA status. F.i. a company with a diversified field of activity registering a higher income from financial investments than the main declared business activity.

FATCA requirements are applied to all financial institutions outside the US and to other financial intermediaries, if they apply FATCA provisions.