FATCA for individuals

The USA implemented legislation to prevent tax evasion by their liable taxpayers, applicable since 1 July 2014. This legislation, called the Foreign Account Tax Compliance Act (FATCA), requires non-US financial institutions, “Foreign Financial Institutions - FFI” (such as ING Luxembourg S.A.) to identify and report persons subject to US taxation, known as “U.S. Persons”.

This legislation applies to any individual or entity identified as a U.S. Person, who hold financial accounts. This page details the impact on individuals only.

FATCA requires financial institutions to:

• Collect information on customers to determine whether they are U.S. Persons via a self-declaration that must be completed and signed by every customer. For U.S. Persons, the Tax Identification Number (“TIN”) must be collected.
  
  
• Identify customers who have at least one of the following indications of a link to the US:
  • US citizenship or residency (nationality or dual nationality (including possession of a green card));
  • a US place of birth;
  • at least one address (postal, residential, remittance or intermediary) in the United States;
  • an American telephone number;
  • standing orders to a US account;
  • a power of attorney over their account granted to a person with a US address (postal, residential, remittance or intermediary).
     
• Annually report data as of 31 December or as of the date the account is closed (to be reported by 30 June of the following year) on:
  • the identity of U.S. Persons: Name, First Name, Address, US Tax Number: USTIN
  • their accounts and the balance of their accounts;
  • the financial income received on these accounts during the year carried forward.

Like most European countries, Luxembourg concluded an Intergovernmental Agreement (IGA) Model 1 with the US on 28 March 2014 to ensure that the provisions of FATCA apply in Luxembourg’s national legislation. As a result, Luxembourg financial institutions (FFIs) must communicate the required information annually (and at the latest by 30 June following the year reported) to the Taxation Authority (Administration des Contributions - ACD). The latter will in turn send this information to the IRS by 30 September of the same year.

For new customers, and in accordance with regulatory obligations, ING Luxembourg is obliged to collect from the customer a signed tax self-certification including their tax residence and their Tax Identification Number. The customer is required to confirm and prove their American status (U.S. Person or non-U.S. Person). Otherwise, ING is not authorised to open a bank account.

ING Luxembourg will continue to offer all its services to US citizens in connection with current and savings accounts, provided that these citizens agree to provide the information required by FATCA.

It should be noted that ING Luxembourg cannot provide securities services to US customers and that if a customer initially identified as non-US becomes US (by citizenship or residence), any securities services provided would have to be stopped and the financial assets would have to be sold or transferred to another financial institution.

If the required documents are not provided within a very specific timeframe, ING Luxembourg will have to consider the customers concerned as undocumented accounts. ING Luxembourg will then be obliged to restrict or even close these accounts and to communicate them to the IRS (via the Luxembourg tax authorities).