HSBC Customers Face Additional Requirements Under FATCA Tax Law
Background
In an effort to prevent US persons from using banks to avoid taxation, HSBC is requiring its customers to provide additional documentation to establish their tax status under the Foreign Account Tax Compliance Act (FATCA).
Impact on Customers
According to HSBC, customers who are considered US persons may need to provide proof of their FATCA status, which could include a declaration or a US tax form from the Internal Revenue Service (IRS). The bank will be communicating with affected customers in the coming months, outlining the specific documentation required and the deadlines for completion.
Understanding FATCA
FATCA does not replace existing US tax rules, but rather adds additional requirements to the existing regime. Customers who are unsure about their FATCA status or classification should consult a professional tax advisor, as HSBC cannot offer advice on these matters.
Reporting Requirements
The bank will also be reporting information to local tax authorities and the IRS on accounts held by US persons, as well as those customers who fail to provide required documentation. The reported information may include personal and financial details, such as account numbers and balances.
Variations in Procedures
In some cases, banks and financial organizations may ask for different documentation from HSBC than another bank, due to variations in their procedures. Customers are advised to consult the IRS website or a professional tax advisor if they have questions about their FATCA status.
Compliance with FATCA Regulations
HSBC has committed to being fully compliant with FATCA regulations and will not open new accounts or offer additional products and services to customers who fail to comply with documentation requests. The bank may also exit relationships with customers who refuse to provide necessary information and documentation, and may be required to withhold tax on certain US source payments coming into customer accounts.
What You Need to Do
Customers affected by FATCA are advised to keep an eye out for correspondence from HSBC and respond promptly to requests for documentation. For more information, customers can visit the IRS website or consult a professional tax advisor.
Key Points
- HSBC is requiring customers to provide additional documentation to establish their tax status under FATCA.
- Customers who are considered US persons may need to provide proof of their FATCA status.
- The bank will be reporting information to local tax authorities and the IRS on accounts held by US persons and those who fail to provide required documentation.
- HSBC has committed to being fully compliant with FATCA regulations and will not open new accounts or offer additional products and services to customers who fail to comply with documentation requests.