On 18th March 2010 the United States (US) Government enacted The Foreign Account Tax Compliance Act (FATCA) to combat tax evasion by US persons holding investments in offshore accounts. FATCA requires Foreign Financial Institutions (FFIs) to provide the US Internal Revenue Service (IRS) with information on US persons invested in accounts outside of the US and for certain non-US entities to provide information about any US owners. St. Lucia Mortgage Finance Company (SMFC) is considered a Foreign Financial Institution and is therefore required to comply.

Saint Lucia signed a 1A reciprocal Intergovernmental Agreement (IGA) with the United States of America on November 19^th, 2015.

The St. Lucia Mortgage Finance Company maintains compliance with the local regulations and legal framework of Saint Lucia.

FAQ

1. What is FATCA?

FATCA stands for the Foreign Account Tax Compliance Act.  FATCA intends to address tax evasion/avoidance by US persons, US Citizens who maintain accounts in foreign financial institutions. This Act was enacted in 2010 as part of the HIRE Act and came into effect July 1, 2014.

2. What is a Foreign Financial Institution (FFI)?

Foreign Financial Institutions (FFIs) are institutions that:

• Accept deposits as a regular business function
• Engaged in the business for investing
• Holds financial assets for the account of others as a substantial portion of its business
• Involved in reinvesting, or trading in securities, partnership interests.

3. Who is a US person?

The term “US person” is defined as:

• U.S. citizen (including dual citizens) even if residing outside of the US
• An individual born in the US unless renounced citizenship
• A holder of a US passport
• U.S. resident alien for tax purposes (green card holders)
• Entities (partnerships, corporations, trusts, etc.) where one or more United States persons have control or over 10% shareholding.

4. Is FATCA applicable to individuals or business customers?

FATCA is applicable to both individuals and business customers.

5. Who is Reportable?

• S. citizen (including dual citizens) persons
• Recalcitrant Account holders
• Substantial owner -10%

6. How will FATCA impact SMFC’s customers?

All customers will be subject to assessment prior to loan account approval. This process seeks to determine which Customer has US indicia. US “indicia” include:  identification of the Account holder as a US citizen or resident, indication of place of birth, current US mailing or residence address (including US post box), current US telephone numbers, standing instructions to transfer funds to an account maintained in the US, person with US address has effective power of attorney or signatory authority, an “in care of” or “hold mail” US address that is the  only address on file. 

If these basic levels of indicia are identified, customers will be required to disclose their legal name, address, and US Tax Information Number (TIN).

7. How will FATCA impact our existing customers?

Customers will be required to update their account information and as per regulations if the account exhibits US indicia, the customer may be asked to provide additional information as a US person or to prove that they are not a US person.

8. FATCA Impact on New Customers

SMFC’s compliance on boarding procedures will impact new customers as additional information may be requested from new applicants to determine whether they are US persons.

9. Do FATCA regulations apply to joint mortgage account holders?

If one individual qualifies as a U.S person and the account balance is above the reporting threshold- FATCA requires that the account must be reported. SMFC customers are advised to seek advice from a tax professional.

FATCA Documentation

Below are the forms you may be required to complete in order to assess and document your status for the purposes of FATCA.  In an effort to meet the obligations imposed under FATCA, your assistance is sought to ensure that your personal records are accurate and up to date. 

 

• SMFC’s FATCA Compliance form
• Person Statements of Affairs
• Customer Identity update form
• Explanation of US Indicia Form
• Other International FATCA Specific Forms & Instructions (IRS Website) [https://www.irs.gov/Businesses/Corporations/FATCA-Related-Forms]
  1. Individuals
     1. W-8 BEN (to be completed by non US individuals who have US indicia)
     2. W-9 (to be completed by US individuals)
  2. Entities
     1. W-8BEN-E (to be completed by non US entities with US beneficial owners)
     2. W-9 (to be completed by US entity)

Please note that if you are signing the above specified forms on behalf of another person, please provide relevant documentation outlining the authority.

U.S. Indicia are criteria used to determine if an account holder may be a U.S. person for the purposes of FATCA.

U.S. Indicia

U.S. Citizenship or Residence

U.S. Place of Birth

U.S. Tax Residency

U.S. Telephone Number (Home, Fax, Work, Mobile)

U.S. Residential Address

U.S. Mailing Address

"In Care Of" or "Hold Mail" Address which is the sole address for the account holder

Standing Order Instructions to a U.S. Address or an Account maintained in the U.S.

Current U.S. Power of Attorney or Signatory Authority granted to a person with a U.S. Address

For more information on FATCA, please visit:

http://irdstlucia.gov.lc/index.php/fatca-section/fatca