Fatca

General information on Fatca

What is FATCA?

FATCA, which stands for Foreign Account Tax Compliance Act, is intended to make United States tax subjects who hold assets outside the United States correctly file tax returns to the United States tax authorities, the IRS. The Dutch government has made reciprocal agreements with the United States government regarding the exchange of certain details. In this regard, the government in Curaçao has made a reciprocal agreement with the United States government regarding the exchange of certain details.

FATCA was enacted by the US Congress in March 2010 as part of the Hiring Incentives to Restore Employment (HIRE) Act and has become an important development in the United States efforts to combat tax evasion by U. S. persons holding investments in offshore accounts. FATCA requires Foreign Financial Institutions (such as i.e. the commercial banks in Curaçao) to report information about financial accounts held by:

  • US persons, or
  • Foreign entities in which US persons hold a substantial ownership interest.

When does FATCA come into force in Curaçao?

As of July 1, 2014, all Curaçao financial institutions are required by law to provide the Curaçao tax authorities with information about customers who could have United States tax liability. As of 2015, the Curaçao tax authority forwards this information to the IRS.

What does United States tax liability mean?

If you have tax liability, this means that you are obliged to file a tax return in the United States. Whether you are required to pay tax depends, among other things, on the tax treaty between Curaçao and the United States or, for instance, your income. The IRS defines a United States taxpayer as a US Person.

What does this mean for you?

You may be contacted by Orco Bank if one or more of the following situations apply to you:

  • You have a United States passport;
  • You live in the United States (or have a green card);
  • You were born in the United States;
  • You have a United States residential or postal address or telephone number;
  • You make periodic money transfers to the United States;
  • You have granted a power of attorney to someone with a United States address;
  • You have an In-Care-Of or Hold-Mail address in the United States.

Companies may also be contacted, for instance if they are domiciled in the United States or incorporated under US law. If you are potentially a US Person or you have a company with beneficial owners who potentially may be a US Person, then Orco Bank will ask you for a statement. If one or more US Persons are identified as such, or if no cooperation is given to the request for information, Orco Bank will report details about your account to the Curaçao tax authority. The Curaçao tax authority will send this information to the IRS. If you believe you do not have tax liability in the United States, you can indicate this to Orco Bank. For instance, this could be the case if you are no longer a US citizen and can prove this with official documentation.