FAQ on FATCA
Questions and answers
- What statutory law requires Nordea to report my data to SKAT?
The act is known as FATCA. This is an abbreviation for theForeign Account Tax Compliance Act, which is a US act against tax evasion in the USA. The Nordic countries have entered into an agreement with the USA to implement the FATCA rules in their national legislation.
- What are the implications of FATCA?
Under the FATCA rules financial institutions are required to identify all US Persons among their customers and each year report certain information on bank accounts directly or indirecly held by such customers. The banks will report the information to SKAT, which will then pass it on to the USA.
- Which information will Nordea report to the local tax authorities?
Information to be reported:
- US tax payer reference
- account number and balance.
- Particularly for private individuals:
- Svar: Will this only affect me if I am a US citizen?
No. The act defines a number of criteria which financial institutions are to keep track of as regards their customers’ accounts to establish if a customer is a US Person. Customers with accounts meeting one or more of these criteria may be asked to provide further information:
• US citizenship or residency in the USA
• born in the USA
• work permit (Green Card)
• annual long-term stay in the USA
• address in the USA
• telephone number in the USA
• recurring payments to an account in the USA
• person with a power of attorney or an authorised signatory with address in the USA
• only a c/o address.
We are required to search our customer database to find indications of US Persons. Consequently, we may contact persons who are actually not US Persons.
I am a US Person. How will I be affected?
If you are a US Person, we may contact you for additional documentation. Or you may want to know if you are required to provide other information to the US authorities.
We do not provide advice in this respect, but recommend you to contact a tax adviser.
We are required once each year to report information about you and your accounts to SKAT.
I am not a US Person and yet you have contacted me?
We may contact you to ask you to confirm your status as a non-US Person if there is reason to believe that you may be a US Person.
If you and a US Person hold a joint account, that account is comprised by FATCA.
Particularly for undertakings
- Particularly for undertakings:
Are only US undertakings affected?
No. FATCA does not only apply to US undertakings.. We will contact many customers to establish their FATCA status and classify them correctly. We may do that by using forms from Nordea or the IRS, depending on the information we need.
I am a US Person and hold a large stake in an undertaking – in what way will I be affected?
Holding a large stake in an undertaking, you are likely to be the beneficial owner/controlling person of the undertaking. We may be required to report information about you, but it depends on the activities of your business. If your undertaking is passive, we must report information about you if you are the beneficial owner or controlling person of the undertaking. An undertaking is considered passive if, for instance, 50% of the undertaking's income or more consists of interest and dividends.
- What documentation do you need?
We will contact the customers affected and tell them what information we need and what forms to be filled in to meet the FATCA rules.
- Will I get the necessary forms from Nordea?
Yes. When contacting a customer, we will either attach the relevant forms or add a link to a website where you can download the forms.
- What will Nordea do if I do not provide the information required by FATCA?
According to the FATCA rules – if customers do not provide the necessary information – we are required to treat them as if they have a reporting duty vis-à-vis the US tax authorities. This means that we will report the same information about you to the local tax authorities as if you had provided documentation confirming your status as a US Person. In special cases we will also have to withhold tax on certain payments from the USA to accounts belonging to customers who do not provide the necessary information.