FATCA

Foreign Account Tax Compliance Act

It is a law passed by the United States Congress on March 18, 2010, in which financial institutions outside the United States of America are required to identify their account holders with tax obligations in that country. These institutions must make available to the US tax authority information related to accounts and financial products of those account holders, both physical persons or natural persons conducting business activity, as well as moral entities.

Common Reporting Standard (CRS)

It is a standard adopted by the Council of the Organization for Economic Co-operation and Development (OECD) -Consejo de la Organización para la Cooperación y Desarrollo Económico (OCDE)-, which requires financial institutions in participating countries to identify their foreign account holders. These institutions should report to their fiscal authority, information related to accounts and financial products of said account holders, both physical persons or natural persons conducting business activity, as well as moral entities.

FATCA and CRS are different reports but based on the same principle. Each law aims to identify foreign clients, whether American (FATCA) or the rest of the world (CRS), and prevent tax evasion.

On November 19th, 2012, the Intergovernmental Agreement (IGA) between the Secretaría de Hacienda y Crédito Público (SHCP) and the US Department of the Treasury was signed. This agreement establishes the obligations and responsibilities for the exchange of information for fiscal purposes among the signatory countries, as is the case of Mexico. With the signing of this agreement, the Financial Institutions in Mexico have obligations related to the identification, classification and reporting of Client accounts with US tax obligations. This information will be reported to the Servicio de Administración Tributaria (SAT), who can share this information with the Internal Revenue Service of the United States (IRS). The last update of the agreement was signed on April 9th, 2014.

Avoid tax evasion of US taxpayers making profits outside of the United States by identifying accounts and financial products they maintain in Foreign Financial Institutions (FFIs).

On July 15th, 2014, the Secretaría de Hacienda y Crédito Público (SHCP) signed the Standard for the Automatic Exchange of Information on Financial Accounts in Tax Matters to the Organization for Economic Cooperation and Development. This agreement establishes the obligations and responsibilities for the exchange of information for fiscal purposes among the signatory countries, as is the case of Mexico. With the signing of this agreement, financial institutions in Mexico have obligations related to the identification, classification and reporting of Client accounts with tax obligations in other countries. This information will be reported to the Tax Administration Service (SAT), which may share this information with the tax authorities of each country.

Prevent tax evasion by those with tax responsibilities abroad and who obtain benefits in other countries, by identifying accounts and financial products they maintain in the Financial Institutions in Mexico.

These laws apply to all account holders “physical, corporate and non-corporate entities” with tax liabilities abroad (United States of America and OECD member countries).

FATCA and CRS consider different types of financial accounts such as: Personal accounts, commercial or business accounts, some insurance contracts and investment accounts, among others.

As part of opening accounts or updating data, you will be asked for new information, and in all cases, the “Auto-Declaración” form. This information will be used to determine if the client has obligations abroad. In the event that tax liability is declared in a participating country, the Client’s accounts may be subject to being reported.

It is a document that allows us to gather the necessary information to identify and classify the Clients through their declaration of fiscal responsibilities abroad for both CRS and FATCA.
This document is obligatory for physical persons or natural persons conducting business activity, as well as corporate and non-corporate entities entities, and will be requested in all openings as of January 1st, 2016.

Obtaining and submitting the document can be done at your local branch, the Internet portal, and/or with your Banking Executive.

Yes. All account holders of Financial Institutions must comply with this obligation following the signing of the Intergovernmental Agreement and the CRS agreement. Likewise, Financial Institutions of other countries that have an agreement or are registered independently will have to comply with these obligations.

No. All Financial Institutions in Mexico must comply with the obligations derived from FATCA and CRS following the signing of the Intergovernmental Agreement and the CRS agreement. Likewise, Financial Institutions of other countries that have an agreement or are registered independently will have to comply with these obligations.

The tax area is a highly specialized field. We are able to provide you with general information about FATCA and CRS found on the SHCP portal:

FATCA http://www.sat.gob.mx/acuerdo_internacional/Paginas/a/default.htm

CRS http://www.sat.gob.mx/acuerdo_internacional/Paginas/b/default.htm

However, we are not authorized to provide specific tax advice. If you require specialized tax advice, we suggest that you consult a tax specialist.

If you have more than one contract with Intercam Grupo Financiero (Bank, Private Banking or Funds), you will only need to complete, sign and submit an -auto declaración- form.