Do you know about FATCA?
FATCA is the Foreign Account tax Compliance Act and is a 2010 USA law that impacts on many people around the world. It is part of the US authorities strategy to stop tax evasion, but affects many people.
FATCA started affecting New Zealanders on 1st July 2014. The new law means that New Zealand financial institutions are required to provide information on any new and existing customers who are US persons, with $50,000 or more in their bank account to IRD. This information is then passed on to the US IRS (Internal Revenue Service).
While this obviously includes the 30,000 US residents who live in NZ, it will probably also cover people who have a US address or phone number associated with their account.
A US tax resident is someone who has been issued a US tax number, known as an ITIN in order to earn income in the USA. Under US tax law, anyone who is a US tax citizen must file a tax return every year, with a find of up to $10,000 for not filing and ignorance is no defence.
According to KPMG Assistant Director Michael Wright, this could include a range of people including:
- Sports people
- Ebook publishers
- Business people
As a consequence of FATCA, if you do have a US tax number, you will be required to provide financial institutions (including your bank and investment providers) with more information from now on.
For more information, check out this blog articles that we wrote:
If you have investments in place through Moneyworks, and you have a US ITIN, please contact us asap so that we ensure that we have all the information required by FATCA.
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For more blog entries that you might be interested in:
By Carey Church