What Is FATCA?

The Foreign Account Tax Compliance Act (FATCA) was enacted by the U.S. Congress under the HIRE Act in

2010 to improve tax compliance by U.S. persons. FATCA achieves this by requiring non-U.S. financial

entities to report the identities of U.S. account holders to the IRS and by assessing a new U.S.-sourced

withholding tax against foreign entities for non-compliance. In summary, FATCA requires “foreign

financial institutions” (“FFIs”) to identify their U.S. account holders to the IRS, while also mandating that

“non-financial foreign entities” (“NFFEs”) disclose substantial U.S. owners to the IRS. This regulation came

into effect July 1, 2014.