The United States (U.S.) Congress enacted the Foreign Account Tax Compliance Act (FATCA) on March 18, 2010. The law requires Foreign1 Financial Institutions (FFIs), like RCBC, that hold U.S. persons’ accounts to report certain information2 to the U.S. Internal Revenue Service (IRS).
In particular, FFIs are required to identify U.S. accounts as part of their client on-boarding procedures. Once such a process is in place, they are further required to identify current accounts with U.S. indicia, including but not limited to incorporating a process that monitors account changes for indicia of U.S. status.
On July 13, 2015, the governments of the Philippines and the U.S entered into an Inter-Governmental Agreement to implement FATCA. Under the IGA, the reporting of U.S. reportable accounts will be coursed through the Bureau of Internal Revenue (BIR), which would in turn submit the reports of all covered Philippine financial institutions to the IRS.
1 Foreign means on-U.S.
2 Account name, address, income received, year-end account balance, U.S. TIN, account number.