In General
In 2010, FATCA legislation was enacted in the United States and referred to the tax compliance of foreign accounts. Under the relevant provisions, persons who are taxable in the US and at the same time hold accounts and other financial assets in foreign financial institutions may be requested to file tax documents and to be taxed in the US.
Liable Persons
If you are a U.S. citizen or permanent resident or have dual citizenship and you have income even from activities outside the US, you may be taxable in the US and you may need to file tax documents with the IRS.
The FATCA Legal Framework
The Austrian government has entered into a bilateral agreement with the US government on the implementation of FATCA rules. This agreement was incorporated into Austrian law on April 29th, 2014 on Tax Compliance of Foreign Accounts. In accordance with this legislation, foreign financial institutions:
- may register with the US Internal Revenue Service (IRS),
- are requested to report certain information about the accounts of their customers who are US tax residents including accounts of certain foreign entities with substantial US owners to the US IRS,
- may withhold and pay tax at a rate of 30% to the IRS for specific payments and transactions if the customer is deemed non-cooperative.
Please note there are two model international agreements (IGA) for the implementation of FATCA, Model1 IGA and Model 2 IGA. The main difference between the two models is that Model 2 requires Financial Institutions to report the relevant information directly to the IRS, whereas Model 1 requires in a first step reporting to the local tax authorities and in a second step the reporting from the local tax authorities to the IRS. Austria implemented Model 2 IGA, which also means that the exchange of information between Austria and the US is non-reciprocal. Currently there are negotiations in place about the transition from Model 2 IGA to a reciprocal agreement patterned after Model 1 IGA. Further developments are still pending.
FATCA Implementation
Financial institutions’ relevant obligations include:
- Registration as Foreign Financial Institution with the IRS.
- The identification and selection of data and specific information about customers who are U.S. tax residents.
- Transmission of this information to the IRS on an annual basis.
- Withholding of a 30% withholding tax on U.S. payments to identified U.S. account holders who refuse the information to be reported to the IRS.
Required Information
The Austrian tax authorities exchange with the US IRS specific data of U.S. accounts, such as:
- Account holder’s name
- For passive non-financial foreign entity (NFFE): the name(s) of any substantial US owner(s)/controlling person - Account holder’s US taxpayer identification number (TIN)
undefined - Account holder’s address
undefined - Account number
- Account balance or value
- For accounts held by recalcitrant/nonconsenting account holders, the aggregate number and balance or value must be reported additionally
- Income paid (except certain gross proceeds from the sale or redemption of property)
- Gross proceeds paid to custodial accounts
Customer’s Eligibility for FATCA
In order to determine your eligibility for FATCA, you may be requested to complete special forms and provide supporting documentation (e.g. self-certification documents and special FATCA-forms, also called W-forms).
Useful Information for FATCA
Considering that we cannot provide you with tax advice, for more information about FATCA you may consult:
- The US Internal Revenue Service (IRS: https://www.irs.gov/).
- The Austrian federal ministry of finance (FATCA-Abkommen (bmf.gv.at)).
- Your tax advisor.
Collection and Processing of Your Personal Data Within the Framework of FATCA
Your relevant information already at our disposal or collected by us through the self-certification documents is forwarded to the US IRS for the fulfillment of Viva Payments’ legal obligation in accordance with the applicable legal framework governing FATCA. As for the processing of your personal data by Viva Payments in accordance with EU Regulation 2016/679 (General Data Protection Regulation) you may refer to Viva Payments’ Privacy Policy.