FATCA is a regulatory requirement for all Financial Institutions (FIs) outside the United States (US) to report, on a regular basis, information about Financial Accounts held by US persons to the US Internal Revenue Service (IRS).
Singapore and the US have signed a Model 1 Intergovernmental Agreement (IGA) to ease the FATCA compliance burden of Singapore-based FIs (SGFIs).
Under this agreement, SGFIs benefit from simplified compliance procedures in reporting the account information of US persons to the Inland Revenue Authority of Singapore (IRAS). IRAS will subsequently provide the information to the US IRS.
FATCA imposes a 30% withholding tax on any "withholdable payment" made to, among others, a Foreign Financial Institution (FFI) including a SGFI. To avoid the withholding tax the SGFI must comply with the customer identification, reporting, and related requirements.
Who is affected by FATCA obligations in Singapore?
You are required to register for FATCA (“Reporting SGFI”) if:
- you are issued a global intermediary identification number (“GIIN”); and
- FIs include, but are not limited to:
- custodial institution (e.g. mutual funds, trust company);
- depository institution (e.g. banks);
- investment entity (e.g. hedge fund or private equity fund); or
- specified insurance company
that is a:
- resident in Singapore, excluding its branch outside Singapore; or
- Singapore branch of any financial institution not resident in Singapore
unless your organisation falls within certain exemptions.
How to comply with FATCA obligations?
- Perform due diligence on all financial accounts held by US persons that you maintain (e.g., Pre-existing Accounts for individuals and entities, New Accounts for individuals and entities) as well as payments to Non-participating Financial Institutions.
- Submit annual FATCA return(s) to IRAS setting out the required information in relation to every US Reportable Account that is maintained by the SGFI.
When is the due date of annual FATCA return filing?
The deadline for information reporting to IRAS is 31 May annually.
Penalties for late filing
Reporting SGFIs may face enforcement actions, including penalty of up to S$10,000.
How we can help
Our network of Mazars professionals can assist in reviewing your business activities to assess how FATCA regulations will impact your organisations and assist you with compliance, customer identification documentation and reporting requirements.