Foreign Account Tax Compliance Act (FATCA) F A QsThe information contained on this site is of a general nature and does not address the legal or tax situation of individual persons or legal entities. There is no guarantee that information provided on this website is up to date, accurate or complete. The information is not tax or legal advice and should not be construed as such. The presented information should not and cannot replace specific advice from your tax and legal professionals.
Get answers to frequently asked questions about the Foreign Account Tax Compliance Act (FATCA).
How is M&T Bank/Wilmington Trust addressing FATCA compliance?
M&T Bank/Wilmington Trust places a high priority on complying with laws and regulations and this includes FATCA. We have teams focused on FATCA, and we continue to develop our processes so that we can accept all of the appropriate forms from our clients and process them properly. We are committed to being fully FATCA compliant in all countries where we operate, such as Germany, Ireland and the United Kingdom.
What is FATCA?
FATCA is the Foreign Account Tax Compliance Act, which was enacted in 2010 as a part of the Hiring Incentives to Restore Employment ("HIRE") Act. The goal of FATCA is to identify U.S. taxpayers who hold financial assets in non-U.S. financial institutions and other offshore accounts so they do not evade U.S. tax obligations.
How will I know what information to provide and what forms to complete?
We will request specific information from you. We recommend consulting with your tax advisor regarding which forms to complete for your specific circumstances or refer to the IRS at www.irs.gov .
Why can't you just tell me which form(s) I should complete?
M&T Bank/Wilmington Trust is unable to offer customers tax advice. Because it's critical that your forms are completed accurately and properly, it's best to consult with your tax advisor.
How do I know if I am affected by FATCA?
FATCA impacts customers and payees that are foreign entities receiving U.S. Sourced payments. The Bank will need to obtain the appropriate Internal Revenue Service tax withholding Forms (W-8 and W-9) to substantiate foreign entity status and determine if the transaction is subject to FATCA withholding. If subject to FATCA, you will be notified.
Does FATCA replace existing U.S. tax rules that I already follow?
FATCA does not replace existing U.S. tax rules. However, it may add requirements that are applicable to you. M&T Bank/Wilmington Trust recommends that you discuss your personal situation with your tax advisor.
How frequently will I have to provide information to M&T Bank/Wilmington Trust for FATCA purposes?
If there is a change in circumstance, you are required to provide updated tax information. Additionally, M&T Bank/Wilmington Trust must be notified if there is a change in your FATCA status. Even though changes have occurred to the IRS forms, the expiration remains the same. W-8 forms will need to be provided every three years. W-9s only need to be updated when there is a change in circumstance.
What information will M&T Bank/Wilmington Trust report to my local tax authority or the IRS?
The information reported to the IRS or your local tax authority will depend on your FATCA classification and any corresponding obligations. The information may include name, address, U.S. taxpayer identification number, account number, account balance/value, etc.
What do I need to do if I am a business customer?
In order to establish your tax status under FATCA, we may ask you for information and documentation related to your business account.
You called me once before and told me you needed information in order to comply with the USA PATRIOT ACT. Is this different?
Yes. This is different. The USA PATRIOT ACT requires banks to collect, verify and record certain information that identifies their customers for the purpose of helping the government fight the funding of terrorism and money laundering activities. By contrast, FATCA was designed specifically to encourage better tax compliance and is focused solely on preventing taxpayers from avoiding U.S. taxation.
I heard banks must withhold from customers who are not FATCA compliant. Is that true?
Yes. Under FATCA, financial institutions are required to withhold from certain payments to non-compliant individuals and entities. In addition, any entity that is a nonparticipating FFI (foreign financial institution) will be subject to FATCA withholding.
I received a statement and I noticed that you're withholding interest due to me. Why is that?
M&T/Wilmington Trust may be withholding on U.S.-sourced payments due to one of the following reasons:
- The appropriate signed documentation has not been received
- The documentation received has not been completed properly or in a timely fashion
- The information on the document states that you are a nonparticipating FFI
I'm having problems collecting and filling out all of the required information and forms and will need more time. Can you give me an extension?
Per FATCA regulations, there is a 90-day grace period starting on the date your account is opened. If documentation is not provided within the 90-day period, the account will be marked as FATCA eligible and 30% withholding may apply.
Could my existing accounts be subject to FATCA?
Preexisting accounts that are impacted by FATCA withholding will be subject to withholding beginning 1/1/2015 if appropriate documentation has not been provided.