July 1, 2013
BSP MEMORANDUM NO. M-2013-030
| TO | : | All Banks and Non-Bank Financial Institutions |
| SUBJECT | : | Foreign Account Tax Compliance Act (FATCA) |
FATCA was enacted in 2010 by the United States (U.S.) Congress as part of the Hiring Incentives to Restore Employment (HIRE) Act. FATCA was enacted to prevent off-shore tax abuses by U.S. taxpayers. FATCA requires, among others, the on-line registration of foreign financial institutions (FFIs) with the U.S. Internal Revenue Service (IRS) and their reporting to the IRS of information about financial accounts by FFIs in which U.S. taxpayers hold a substantial ownership interest. Non-compliance with FATCA requirements will result to the imposition of a 30 percent withholding tax on payments of U.S.-sourced income to FFIs.
The FFIs referred to in the FATCA pertain to financial institutions which are organized under the laws of a jurisdiction other than the United States of America.
BSP-supervised institutions are reminded to evaluate if they are FFIs covered by FATCA. They are advised to study the potential effects of FATCA to their businesses and determine the necessary steps to take...
