Sberbank has completed the registration procedure with the US Internal Revenue Service (IRS) as a financial institution that complies with the requirements of FATCA (Participating financial institution not covered by an IGA).
The bank has been assigned a unique identification number (GIIN): JPCJ0H.00028.ME.643.
Form confirming the status of Sberbank as the beneficial owner of the income received and indicating the FATCA status: W-8BEN-E
Form confirming the status of Sberbank as an intermediary in the transfer of received income in favor of a third party, indicating FATCA status: W-8IMY
Information for clients - individuals
We hereby inform customers - individuals, as well as individual entrepreneurs and individuals engaged in private practice in accordance with the procedure established by the legislation of the Russian Federation (lawyers, notaries, etc.), interested in concluding contracts with PJSC Sberbank(hereinafter - the Bank), on the possibility of disclosing information about its status as a US taxpayer in FATCA purposes.
When concluding an agreement for any service, you can fill out the Bank's questionnaire containing additional FATCA information (hereinafter - the Questionnaire). The Questionnaire form and the procedure for filling it out are presented in the relevant sections of products and services on the Bank's website, as well as in information folders at service offices.
As part of filling out the Questionnaire, you will be required to provide the following additional documents, depending on your answers to the Questionnaire:
If you are a US citizen or US tax resident, you must provide a completed Form W-9 (Form W-9 is available on the website of the US Internal Revenue Service: http://www.irs.gov/pub/irs-pdf/fw9.pdf ). Consult with your tax advisor about the rules for completing the form.
If you were born in the United States but are not a US citizen, you must provide (1) a certificate of loss of US citizenship on Form DS 4083 of the Bureau of Consular Affairs of the US Department of State, or (2) a written explanation regarding the lack of US citizenship (for example, an indication of the reason , which did not acquire U.S. citizenship by birth).
You can hand over the completed Questionnaire and the documents listed above (if available) to the Bank's employee at the place of your service. Information about US taxpayers, including data on the number/numbers of the Client's account/accounts with the Bank, the balance/balances on the account/accounts, on transactions on the account/accounts, may be transferred by the Bank to the US Internal Revenue Service (IRS) or to a person acting as such an authority , to the extent and in the manner prescribed by the legislation of the Russian Federation.
Information for clients - legal entities
We hereby inform clients - legal entities, including credit organizations interested in concluding agreements with the Bank on the possibility of disclosing information about themselves for the purposes of FATCA.
You can fill out special sections of the Bank's questionnaire containing additional FATCA information (hereinafter - the Questionnaire) as part of the standard identification procedure when applying for services at the Bank. The Questionnaire form is presented on the Bank's website in the relevant sections of products and services.
As part of completing the Questionnaire, you may be required to provide additional documents depending on your answers to the Questionnaire:
IRS Forms W-9/ W-8 and other documents.
Templates for Forms W-9 and W-8 are available from the IRS portal at http://www.irs.gov. The Bank does not provide consultations on the procedure for filling out the FATCA Questionnaire and other additional documents in order to establish the specific status of a taxpayer for the purposes of FATCA. Consult with your tax advisor about the rules for completing the forms.
You can hand over the completed Questionnaire and additional documents (if available) to the Bank's employee at the place of your service.
Information about US taxpayers, including data on the number/numbers of the Client's account/accounts with the Bank, the balance/balances on the account/accounts, on transactions on the account/accounts, may be transferred by the Bank to the US Internal Revenue Service (IRS) or to a person acting as such an authority , to the extent and in the manner prescribed by the legislation of the Russian Federation.
And confirmed the intention to start in 2018 the exchange of information for 2017.
Currently tax code Russian Federation supplemented by provisions (Federal Law No. 340-FZ of November 27, 2017), according to which Russian organizations financial market are required to identify customers who are tax residents foreign countries(territories), and provide data on such clients and their accounts to the Federal Tax Service of Russia, and clients, in turn, are required to provide this information at the request of a financial institution.
Sberbank does not provide its clients with consulting services on determining tax residency in accordance with FATCA and CRS requirements. On this issue, you can contact a tax consultant or read the information on tax residency for different countries on the OECD portal at http://www.oecd.org/tax/automatic-exchange/crs-implementation-and-assistance/tax-residency/#d.en.347760
In order to confirm your tax residency, an employee of Sberbank may ask clarifying questions, as well as ask you to fill out a self-certification form.
FATCA (Foreign Account Tax Compliance Act) was adopted in the United States on March 18, 2010. The main goal is to prevent tax evasion by US residents. For Russian banks and many other financial institutions, this means that from 2016 it will be necessary to inform Tax Office United States (IRS) of all accounts held by them and income of US tax residents.
By December 31, 2015, most banks need to decide whether to join FATCA (PFFI - foreign financial institution, participating in FATCA) and report to the US tax authorities about the clients of interest to them, or not to join and become NPFFI (non-FATCA non-participating foreign financial institution).
The NPFFI status is associated with significant risks for banks. Most payments coming to a non-aligned financial institution from PFFIs (FATCA affiliated financial institutions around the world) will be subject to a penalty of 30% of the amount of the payment. This applies to payments to both NPFFI and its clients.
The Russian financial community has made its choice. By the summer of 2015, more than 90% of Russian banks had joined FATCA (complete list of affiliated financial institutions) .
This material proposes specific steps that banks should take in the very near future - at the end of 2015 and the beginning of 2016.
Consider the basic business process for preparing and filing with the IRS an IRS-mandated Form 8966. The process is summarized in the diagram below, the points of which we will refer to below.
First of all, it is necessary to identify the customers who can be American tax residents (clause 1.).
The main features of an American tax resident for an individual:
The main features of an American tax resident for a legal entity:
If a sign indicating that the client may be an American tax resident (account holders with U.S. Indicia) is found, the PFFI bank must determine the client's FATCA status (clause 3). To do this, the bank collects the necessary information for the correct identification and preparation of forms 8966 (clause 2). Depending on the client's FATCA status, the bank generates an individual report for each client or a summary report for all clients of a certain type of FATCA status.
Ideally, the sequence of actions is as follows:
Stage 1 . The client is notified that he has the characteristics of an American taxpayer.
Stage 2. Client or certifies your tax status on a Form W-9/W-8 or provides documents confirming that he not falls under the tax jurisdiction of the United States.
Stage 3. The client gives or does not give his consent to the provision of information to the IRS (clause 6). If at the first stage he did not provide either tax forms or confirmation that he is not an American resident, then he receives the status of Recalcitrant account holders with U.S. Indicia, and then it makes no sense to ask him for permission to provide data to the IRS, individual reports it is not sent to the IRS.
|
Client |
Allowed to provide information to the IRS |
Not allowed to provide information to the IRS |
||
|
Description |
FATCA client status |
Fillable parts of Form 8966 |
FATCA client status |
Fillable parts of Form 8966 |
|
Individuals: Legal entities registered in the United States for which there are no established restrictions |
Specified U.S. persons |
Recalcitrant account holders that are U.S. persons |
Part 5 - one summary report for all clients per FATCA status option |
|
|
Non-U.S. companies (other than financial companies) that are controlled by Specified U.S. persons |
Passive NFFE with substantial U.S. owner(s) |
Recalcitrant account holders that are passive NFFEs |
||
|
Individuals and legal entities that have signs of American taxpayers |
Recalcitrant account holders with U.S. India |
|||
|
Financial companies (including a bank) not participating in FATCA |
Non-participating FFI (NPFFI) |
|||
|
Clients holding inactive bank accounts |
Dormant Accounts |
|||
It should be noted that the deadline for the bank to request documents confirming the payment of taxes in the United States from tax residents is June 30, 2016, and it is necessary to send data to the IRS for all clients earlier - before March 30, 2016.
Therefore, some banks have chosen to submit individual forms to the IRS for all IRS-authorized clients who have submitted the required information for Form 8966, including the TIN - Taxpayer Identification Number. Forms W-9 and W-8 can be submitted by these customers to the bank later, until June 30, 2016.
Annually, by March 30 of each year, a financial institution must prepare information for the IRS on form 8966 (clause 7) - individual for each resident (clause 7A) and consolidated by groups of residents (clause 7B), in accordance with the FATCA indicated above -statuses.
The generated report (which is an XML FATCA file) is encrypted and sent to the IRS using the International Data Exchange Service (IDES) (clause 8).
This general scheme, provided for by FATCA, has undergone changes due to the requirements of Russian legislation - the federal law No. 173-FZ of June 28, 2014 "On the specifics of the implementation financial transactions With foreign citizens and legal entities…”.
The main requirements of the law that affect the business process of preparing reports for the IRS:
Prohibition of disclosure of information to the US tax authorities for certain types of clients: it is prohibited to collect and transfer information to the IRS about the accounts of individuals - citizens of the Russian Federation who do not have a second citizenship outside the countries - members of the Customs Union, or a residence permit in a foreign state.
The need to obtain permission from the regulator to transfer data to the IRS for each client.
Mandatory provision of all information sent to the IRS to Russian regulators as well.
To fulfill these requirements, after identifying the client and determining his FATCA status, the bank (clause 4) checks the possibility of transferring data to the IRS, in accordance with 173-FZ, and if there are no general restrictions, then directly requests the regulator about the possibility of providing information. And only in case of obtaining permission from the regulator (clause 5), the bank requests permission to provide information from the client itself (clause 6).
As a result, reporting to the IRS is a complex technological task, even in the simplest case described above. In practice, things can be much more complicated.
For example, in the above business process, it is assumed that all data on customers, accounts, operations and income are stored in a single information system, where the entire business cycle is organized: from the selection of "suspicious" clients to fixing the facts of correctly received IDS reports.
At the same time, in practice, there may be several accounting systems “at the entrance” (and in large banks this is more a rule than an exception). For example, the ABS records interest income received from deposit accounts, while the financial back offices account for dividends and coupon income. In this case, data is imported, controlled and consolidated in order to obtain all information structured by clients: for all their accounts, operations and incomes.
Banks are already automating sending customer data to the IRS, and this is only the first, easiest part of supporting FATCA requirements.
Starting January 1, 2017, a penalty will begin on the income of "refuseniks" (those who refused to disclose their resident tax status) received from sources in the United States. The penalty will be a withholding of 30% of FDAP (Fixed, Definable, Annual and Recurring Income). FDAP includes interest income, dividends, royalties, rent, payment for services provided, proceeds from the sale of US assets (including securities), etc.
This will require correct calculation of FDAP income. To do this, it is necessary to determine the status of all "suspicious" payments and take into account all the provided exceptions. In addition, it will be necessary to deposit withheld fines, interact correctly with Russian regulators (so far 173-FZ does not provide for withholding tax in favor of foreign tax authorities), etc.
By this time, the bank should store all tax forms submitted by customers who have received FATCA status. At the same time, the law provides not only the obligation of the bank to request tax documentation, but also regulates minimum terms storage, requires fixing the date of receipt of documentation, etc.
Thus, meeting FATCA requirements in 2017 will require effective work with a lot of information that needs to be consolidated into a single solution. That is why many banks, especially large ones or those with an extensive IT structure, need a specialized solution to comply with FATCA requirements, which will allow accounting and analysis of primary data submitted to the IRS of reports on all clients with various FATCA statuses, tax documentation and the timing of its receipts from customers, etc.
A year ago, after analyzing the entire package of requirements related to FATCA, we came to the need to create a specialized industrial solution "Program bank.FATCA» .
Of course, the first customers were big banks who quickly recognized the magnitude of the problem and had already carried out the necessary preliminary work. We are currently running two FATCA projects with top 50 banks. One of them has Western shareholders, which puts a number of additional requirements before us.
FATCA (Foreign Account Tax Compliance Act) is the US Foreign Account Taxation Act, which aims to counter US tax evasion on US taxpayers' income received through financial institutions outside the US. U.S. taxpayers, regardless of a person's actual location, include:
To fulfill the primary purpose of the FATCA law - control over the financial accounts of US taxpayers - all financial and non-financial institutions must:
Participants in the process:
FATCA regulations require financial institutions to enter into an agreement with the IRS by registering on the IRS portal. NCO JSC NSD (hereinafter referred to as NSD) registered with the US Internal Revenue Service as a financial institution that complies with FATCA (Participating FFI) requirements. As a result of registration, a Global Intermediary Identification Number (GIIN) was assigned – XNBBND.00000.LE.643.
NSD is registered as a Leading Company (Lead FFI) for the Moscow Exchange Group.
Due to the fact that NSD has committed itself to fully comply with FATCA requirements, clients need to take a number of actions:
These requirements apply to all customers when concluding the following contracts:
Failure to comply with FATCA may result in negative consequences such as failure to enter into an agreement, termination of the agreement with the client and closing of the corresponding account, or the application of a 30% tax rate on income from sources in the United States, and subsequently on gross receipts from the United States and transit payments.
CRS (Common Reporting Standard) - A standard for the automatic exchange of financial account information developed by the OECD (Organization for Economic Co-operation and Development).
CRS is an international analogue of FATCA aimed at increasing tax transparency and preventing global tax evasion.
The Russian Federation in May 2016 confirmed its participation in the implementation of the CRS requirements.
Description of the identification process for FATCA/CRS purposes:
Please note that the Client must notify NSD of any change in the information previously provided in the FATCA Questionnaire and additional documents by filling out the FATCA/CRS Questionnaire again.
1 - Information about the format and specifications of this Notice is posted on the NSD official website on the page "
When opening bank account in a foreign or large Russian bank, many today are faced with the need to fill out a FATCA form. But what is it and why should we fill it.
Under the US Foreign Account Tax Compliance Act of 2010, effective July 1, 2014 (FATCA), US citizens are required to report and provide information about their foreign accounts held abroad. . In addition, the obligation to report tax service States (IRS) on the presence of US taxpayer accounts occurs with all foreign (non-US) financial institutions (primarily banks, as well as depositories, Insurance companies and other financial institutions, which I will write about in more detail later). Thus, the States organized full control over the activities and incomes of their citizens arising from this activity (I note that America is the only country in which all citizens, without exception, are tax residents of the country by the fact of citizenship, regardless of place of residence).
For other states, the obligation to provide information on the accounts of American citizens arises on the basis of intergovernmental FATCA agreements, which are concluded (or are being negotiated) by almost all European, and not only European, countries. There are two models for such an agreement:
In case of failure to provide information, sanctions are applied, which will be discussed below. Moreover, if a specific bank has not fulfilled the FATCA requirements, then sanctions will be applied specifically to its clients, and if the whole country has not signed FATCA, then this tax withholding measure will be applied to all clients of banks in this country.
To date, Russia has not signed the FATCA intergovernmental agreement. And due to the international situation and the sanctions imposed against Russia, signing is not expected in the near future. Respectively Russian banks(and other financial institutions) are not required to report information on US customers. But not everything is as good as we would like. Because as a result, when settling with American banks, sanctions may be applied to clients of Russian banks. To avoid this, many Russian financial institutions (90%) have privately joined the FATCA requirements (by registering with the federal tax service and obtaining a global intermediate identification number (GIIN)) and collect the necessary information from their customers. About Data Action Ratio banking structures with internal Russian legislation and international will write in a separate article.
Let us dwell a little more on the application of sanctions to non-FATCA participants (the so-called unscrupulous account holders). Tax agents in the States levy a 30% withholding tax on specific U.S. taxable payments made to non-compliant parties under the FATCA Act, and such payments include:
So, if, when opening an account, the bank asks you to fill out the FATCA form, then do not be surprised or scared. Especially if you are not a US taxpayer, you can safely fill it out. If at the same time you do not represent a company that is a financial institution and does not work in the interests of American beneficiaries, then information about you will never go to the federal tax service. Therefore, it is better to fill out the form, otherwise the bank may refuse to open an account or conduct transactions.
In order to identify you, the bank asks you to indicate in the questionnaire the type of company to which you belong (applicable to legal entities). Main types: financial company and non-financial company. If a non-financial company, then an active or passive non-financial company. It is necessary to determine your affiliation in order to understand the amount of information that needs to be obtained from you. If you are a passive non-financial company (for example, a holding company), then you must provide information about the beneficiaries of your business to confirm that there are no US residents there. If you are an active non-financial company, then the amount of information you provide is minimal (in fact, you are limited to putting one checkmark in the form).
It should not be difficult to determine the type of company to which your organization belongs, because a dictionary with detailed definitions is attached to the form. In short, then:
Financial companies- banking, depositary, investment, specialized insurance organizations, as well as holding companies that are included in the same group with the organizations listed above.
Non-financial companies- all other non-financial, in particular various non-profit organizations(public, administrative, charitable, cultural, etc.).
Active non-financial companies are companies that meet one of the following criteria:
Passive non-financial companies- all companies that do not meet the above criteria. And, accordingly, more than 50% is profit in the form passive income(interest, dividends, royalties, lease payments, etc.).
Thus, if you see that your company belongs to financial institutions, then you have an obligation to join FATCA and report on your American clients. If your company is passive non-financial, then you need to inform the bank about your beneficiaries. If you are an active non-financial company, then you minimum requirements- just confirm your status in the form. Feel free to fill out. If suddenly you made a little mistake or your company changed its status, then this is also okay, the bank will inform you about this as errors are discovered. There are no sanctions for this.
When opening a bank account in a foreign or large Russian bank, many today are faced with the need to fill out a FATCA form. But what is it and why should we fill it.
Under the US Foreign Account Tax Compliance Act of 2010, effective July 1, 2014 (FATCA), US citizens are required to report and provide information about their foreign accounts held abroad. . In addition, all foreign (non-US) financial institutions (primarily banks, as well as depositories, insurance companies, and other financial institutions, which I will write about in more detail later ). Thus, the States organized full control over the activities and incomes of their citizens arising from this activity (I note that America is the only country in which all citizens, without exception, are tax residents of the country by the fact of citizenship, regardless of place of residence).
For other states, the obligation to provide information on the accounts of American citizens arises on the basis of intergovernmental FATCA agreements, which are concluded (or are being negotiated) by almost all European, and not only European, countries. There are two models for such an agreement:
In case of failure to provide information, sanctions are applied, which will be discussed below. Moreover, if a specific bank has not fulfilled the FATCA requirements, then sanctions will be applied specifically to its clients, and if the whole country has not signed FATCA, then this tax withholding measure will be applied to all clients of banks in this country.
To date, Russia has not signed the FATCA intergovernmental agreement. And due to the international situation and the sanctions imposed against Russia, signing is not expected in the near future. Accordingly, Russian banks (and other financial institutions) are not required to report information on US clients. But not everything is as good as we would like. Because as a result, when settling with American banks, sanctions may be applied to clients of Russian banks. To avoid this, many Russian financial institutions (90%) have privately joined the FATCA requirements (by registering with the federal tax service and obtaining a global intermediate identification number (GIIN)) and collect the necessary information from their customers. I will write about the correlation of the actions of these banking structures with domestic Russian and international legislation in a separate article.
Let us dwell a little more on the application of sanctions to non-FATCA participants (the so-called unscrupulous account holders). Withholding agents in the States levy 30% withholding on specific U.S. taxable payments made to non-compliant parties under the FATCA Act, and such payments include:
So, if, when opening an account, the bank asks you to fill out the FATCA form, then do not be surprised or scared. Especially if you are not a US taxpayer, you can safely fill it out. If at the same time you do not represent a company that is a financial institution and does not work in the interests of American beneficiaries, then information about you will never go to the federal tax service. Therefore, it is better to fill out the form, otherwise the bank may refuse to open an account or conduct transactions.
In order to identify you, the bank asks you to indicate in the questionnaire the type of company to which you belong (applicable to legal entities). Main types: financial company and non-financial company. If a non-financial company, then an active or passive non-financial company. It is necessary to determine your affiliation in order to understand the amount of information that needs to be obtained from you. If you are a passive non-financial company (for example, a holding company), then you must provide information about the beneficiaries of your business to confirm that there are no US residents there. If you are an active non-financial company, then the amount of information you provide is minimal (in fact, you are limited to putting one checkmark in the form).
It should not be difficult to determine the type of company to which your organization belongs, because a dictionary with detailed definitions is attached to the form. In short, then:
Financial companies- banking, depository, investment, specialized insurance organizations, as well as holding companies that are included in the same group with the organizations listed above.
Non-financial companies- all other non-financial organizations, in particular various non-profit organizations (public, administrative, charitable, cultural, etc.).
Active non-financial companies are companies that meet one of the following criteria:
Passive non-financial companies- all companies that do not meet the above criteria. And accordingly, more than 50% is profit in the form of passive income (interest, dividends, royalties, rental payments, etc.).
Thus, if you see that your company belongs to financial institutions, then you have an obligation to join FATCA and report on your American clients. If your company is passive non-financial, then you need to inform the bank about your beneficiaries. If you are an active non-financial company, then the minimum requirements for you are only to confirm your status in the form. Feel free to fill out. If suddenly you made a little mistake or your company changed its status, then this is also okay, the bank will inform you about this as errors are discovered. There are no sanctions for this.
