Foreign Account Tax Compliance Act (FATCA)

The Foreign Account The Foreign Account Tax Compliance Act (FATCA) is a United States (US) law requiring all financial institutions around the world to identify customers who may be US persons and report their account information to their local tax authority. In New Zealand, the tax authority is the Inland Revenue Department (IRD).

For FATCA Purposes, what does a US person mean?

A US person is a person or organisation who falls under any of the following categories:

  • US citizens (sole or dual)
  • US tax residents
  • US Green Card holders
  • US Entities that are specified US persons
  • Certain non-US entities that are controlled by US tax residents or US citizens
  • Certain financial institutions that are non-participating

 

FATCA requires all Foreign Financial Institutions that are not exempt, including New Zealand Financial Institutions, to register with, and report to the US Internal Revenue Service each year on certain financial accounts held with them.
While the primary goal of FATCA is to gain information about US persons, if a Foreign Financial Institution does not meet the documentation and reporting requirements, FATCA will impose a withholding tax.
As such, New Zealand Financial Institutions that choose not to comply with FATCA may face potential financial and reputational damage.

As a new customer to NBS, you will be asked some questions so that we can understand whether you may have any US foreign tax obligations. For many customers there will be little to no impact.
However, for customers who may fall within the ‘US Person’ category, there will be requirement to provide more information, once their account balance exceeds a certain USD$ thresholds.
We will monitor customer accounts for FATCA purposes and disclose certain US persons’ information to the New Zealand Inland Revenue Department and the US Internal Revenue Service as required under FATCA.
If you are unsure about your tax obligations outside of New Zealand, we recommend that you contact a trusted tax advisor.

Want to know more?

If you have any further questions about FATCA, please search for FATCA on the Inland Revenue Department website - www.ird.govt.nz