Myth about FATCA Law in Singapore

1. Myth About FATCA Law in Singapore 

2. FATCA is a tax- • No, it is not. However, the FATCA rules and regulations are very much similar to expat taxation, but FATCA doesn’t focus on income, tax rates, or tax liability. • It has been implemented to identify US investors with foreign financial interests in making it easier for the IRS to audit all those incomes and assets that could remain hidden offshore.

3. FATCA regulates the US accounts only-  • That’s absolutely not the reality, the FATCA compliance in Singapore not just limited to US taxpayer accounts, but applicable to every account to reduce the evasion of tax. • The law of the FATCA has been regulated to target the international financial institutions, not the US taxpayers with offshore accounts abroad.

4. Americans living in Singapore give up their US citizenship due to the burden and liabilities imposed by FATCA- • Absolutely there is no truth in this claim. The provision of FATCA imposes no obligation beyond the law on the American citizens living abroad. • Instead, FATCA’s withholding obligation applies to the institutions making payments to FFIs, and the due diligence and reporting requirements fall on the FFIs.

5. FATCA does not apply to non-financial companies- • This is again far from the truth, as the FATCA tax in Singapore, specifically targets the non-financial foreign companies who have not reported the assets of income of US persons to the IRS. • FATCA compliance in Singapore applies to withholding agents, including the US, foreign, financial, and non-financial companies- all come under the guideline of the FATCA law and are liable also if fail to follow the law.

6. FATCA use foreign banks as an extension of the IRS- • Those who are making such false claim must have mixed the tax filing liabilities with actual enforcement. • The motive of FATCA is the identification and reporting of foreign financial accounts held by US citizens or entities mentioned above with US owners. • The law of FATCA in Singapore only requires the foreign financial institution to share the original information about the financial accounts held by US taxpayers. That clearly means FATCA regulation doesn’t use foreign banks or institutions as an extension of the IRS.

7. FATCA forced foreign banks to close US accounts- • There’s no evidence in this argument. The FATCA requires FFI (foreign financial institution) to implement adequate controls and follow the procedures aiming to identify accounts held or controlled by US taxpayers. • However, the FATCA banks in Singapore make a disclosure of the accounts and if no reportable accounts were identified, the bank certifies that no such account was found. Source:- https://tananet.net/myth-about-fatca-law-in-singapore-that-you-should-never-believe/

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