July 2014 FATCA What is FATCA? Foreign Account Tax Compliance Act (FATCA) rules are provisions of the U.S. HIRE (Hiring Incentives to Restore Employment) Act, signed into U.S. law 18 March 2010. Expansive information reporting rules aimed at ensuring that U.S. persons with financial assets outside the U.S. are paying the correct amount of U.S. tax. Contact Should you have any queries or comments, please contact your usual EY contact in Africa or: FATCA regime to be administered by U.S. financial institutions and foreign (non-U.S.) financial institutions (FFIs). Main objective is to counter offshore tax avoidance by U.S. persons by strengthening the information reporting and compliance requirements around U.S. persons who have money invested outside of the U.S. FATCA Advisory Leader Mike Kane +27 11 772 5121 mike.kane@za.ey.com FATCA Africa & Asset Management Lead Eugene Skrynnyk +27 82 294 1925 eugene.skrynnyk@za.ey.com EY, The Democratic Republic of Congo Baraka Kabemba +243 993 435 296 baraka.kabemba@cd.ey.com Raïssa Rwigema +243 972 003 904 raissa.rwigema@cd.ey.com Why is FATCA important? FATCA requires FFIs to: •► Identify, document and report U.S. - owned accounts (existing and new customers) to the U.S. Internal Revenue Service (IRS). •► Appoint a Responsible Officer, who will have to make a number of certifications to the IRS. •► Enter into an agreement and register with the IRS. •► Phase-in implementation of requirements between 2014 and 2017, with first requirements already effective 1 July 2014. •► Apply withholding to non-compliant customers and counterparties. •► Become compliant or otherwise be subject to a 30% withholding tax on certain U.S. source income and gross proceeds a financial institution receives on U.S. investments. Non-compliance may make it difficult to do business with other financial institutions that are FATCA compliant. EY, Ghana Djabanor Narh +233 244 968 911 djabanor.narh@gh.ey.com Competitive disadvantage due to the application of the 30% withholding tax. FATCA affects the whole operating model, including legal entities and business units, products, processes, systems, etc. Nii Teiko Aryee 233 302 779429 NiiTeiko.Aryee001@gh.ey.com EY, Kenya Amaha Bekele +254 786397198 amaha.bekele@ke.ey.com Akshay Shah +254 788 644 806 akshay.shah@ke.ey.com EY, Mauritius Shailen Ramgoolam +230 255 2514 shailen.ramgoolam@mu.ey.com EY, Nigeria Ben Afudego +234 812 287 7880 ben.afudego@ng.ey.com EY, South Africa Megan Couzyn +27 83 235 7326 megan.couzyn@za.ey.com Pieter Boer +27 82 601 5085 pieter.boer@za.ey.com Who does FATCA impact? •► FFIs: • Will generally include any entity that accepts deposits; holds financial assets for the account of others; is engaged in investing, reinvesting, or trading in securities, commodities or derivatives; or has cash value insurance products. • In practice: banks, investment companies, investment or fund managers, brokers, insurance companies. • Includes all the entity’s global affiliated financial institutions (> 50% common shareholding). •► Non-Financial Foreign Entities: investment groups, family offices, certain holding companies, certain start-ups, etc. •► U.S. persons: account holder or customer who is a citizen or resident of the U.S. or an entity formed under U.S. law. EY service offering: ► • Provide technical guidance on the FATCA regulations, project mobilization and tools. •► Conduct an impact assessment for your organization to understand and quantify the level of FATCA impact. •► Support solution optimization and efficient implementation of FATCA requirements. EY Assurance | Tax | Transactions | Advisory About EY EY is a global leader in assurance, tax, transaction and advisory services. The insights and quality services we deliver help build trust and confidence in the capital markets and in economies the world over. We develop outstanding leaders who team to deliver on our promises to all of our stakeholders. In so doing, we play a critical role in building a better working world for our people, for our clients and for our communities. EY refers to the global organisation and may refer to one or more of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. For more information about our organisation, please visit ey.com. © 2013 EYGM Limited. All Rights Reserved. In line with EY’s commitment to minimise its impact on the environment, this document has been printed on paper with a high recycled content. This material has been prepared for general informational purposes only and is not intended to be relied upon as accounting, tax, or other professional advice. Please refer to your advisors for specific advice. ey.com Studio ref. 130718. Artwork by Sewpersadh.