Automatic Exchange of Tax Information – FAQ

Governments around the world are introducing new information gathering and reporting requirements for financial institutions to help fight tax evasion and protect the integrity of tax systems.

TBanque is committed to all applicable legal and regulatory requirements. Among other regimes, it is subject to the Foreign Account Tax Compliance Act (FATCA) and the Common Reporting Standard (CRS).

As the satisfaction of our customers is our highest priority, we would like to help you understand what each of the above regulations means for you.

The Foreign Account Tax Compliance Act (here and after: FATCA) was introduced by the United States Department of the Treasury and the Internal Revenue Service (IRS). The purpose of FATCA is to encourage better tax compliance by preventing “US persons” from using banks and other financial organisations to avoid US taxation on their income and assets.

A significant number of countries and territories worldwide have already signed intergovernmental agreements (IGAs) relating to FATCA compliance with the United States government. These IGAs lead to FATCA legislation becoming integrated into local laws.

For an updated list of IGAs, please click here. 

TBanque is required to report information on financial accounts held directly or indirectly by US persons once a year.

Therefore, if we have reason to believe you are a US person for FATCA purposes, we may need to contact you to request further information and documentation.

Also, it is important to stress that FATCA is an ongoing process. If your account information changes, we may be required to contact you to obtain additional information or documentation so that we can update your account classification under FATCA. In addition, if there is a change in your circumstances affecting your FATCA status, you must notify us by opening a ticket with the TBanque Customer Service Center within 30 days of the change.

TBanque may also need to report information about customers who do not provide the required documentation to us.

In certain circumstances and where customers fail to provide the appropriate documentation or when doing business with non-compliant entities, we may be required to apply a 24% US withholding tax on certain types of US income paid to such customers (‘Backup withholding’).

In addition, failure to provide appropriate documentation within the time frame specified by TBanque may cause your account to be limited or closed.

The term ‘US person’ means the following (but is not limited to):

• a citizen of the US, including an individual born in the US, regardless of the person’s residence 
• a dual citizen where one country is the US, regardless of the person’s residence
• a US permanent resident card (green card) holder, regardless of the person’s residence (and who has not abandoned green card status) 
• a person who qualifies as a resident for US tax purposes because they have met the substantial presence test as defined by the Internal Revenue Code 
• US corporations, US partnerships, US estates and US trusts

If you are unsure as to whether you meet the US person definition, you must seek independent tax advice or refer to the IRS website for more information.

All financial institutions in IGA countries, including banks, insurers and asset management businesses, are subject to FATCA and are required to be compliant with it. 

TBanque is committed to being fully FATCA-compliant in all countries and territories in which we operate.

We report both personal information (for example, name, address, US taxpayer identification number), and financial information (for example, account number, account balance, amounts paid into the account), as per FATCA reporting rules.

A joint account which has one US owner is treated as a US account and, therefore, the entire account is subject to FATCA legislation.

Depending on your account type, you may be asked to provide us with some certifications related to FATCA when you open your account. 

For corporate accounts, TBanque collects entity clients’ tax self-certifications via the corporate account opening form. Defining the entity type for FATCA certification purposes can be a complex process that may require independent tax advice. TBanque cannot and does not provide tax advice, but TBanque’s FATCA and CRS guide may help you to establish your entity type for FATCA purposes when you open a corporate account. 

Subsequently, we may have to contact you for further information and documentation. 

We communicate full details of the information and documentation needed for FATCA purposes to the relevant customers. Documents may include US tax forms (also referred to as W-series forms). US persons are required to fill out a W-9 form, while non-US persons may be required to fill out the W-8 series.

You should supply the requested documentation and information by the date specified in the email which you receive from TBanque.

TBanque is committed to being fully FATCA-compliant in all countries in which we operate.

The TBanque Group may not open new accounts or offer additional products and services to customers who choose not to comply with TBanque’s requests for documentation to establish their status under FATCA.

In accordance with FATCA regulations, TBanque may exit the relationship with customers who decide not to provide the necessary information and documentation within the regulatory time frame.

TBanque may need to provide authorities with information about customers who do not provide the required documentation/information to the applicable local tax authorities.

We may also be required to withhold tax on certain US source payments coming into your account.

In addition, failure to provide appropriate documentation within the time frame specified by TBanque may cause your account to be limited or closed.

The Common Reporting Standard (here and after: CRS), referred to as the Standard for Automatic Exchange of Financial Account Information (AEOI), developed by the Organisation for Economic Cooperation and Development (OECD), calls on countries to obtain information from their financial institutions and automatically exchange that information with other countries on an annual basis. The CRS sets out the financial account information to be exchanged, the financial institutions required to report, the different types of accounts and taxpayers covered, as well as common due diligence procedures to be followed by financial institutions.

Reference: http://www.oecd.org/tax/automatic-exchange/common-reporting-standard/

The CRS seeks to establish the tax residency of customers. Under the CRS, financial institutions such as TBanque are required to identify customers who appear to be tax residents in a country other than the one where they hold their accounts and products, and report certain information to TBanque’s local tax authorities. The local tax authorities may then share that information with the tax authority in the country where the customer is a tax resident.

Under the CRS, tax authorities require financial institutions such as TBanque to collect and report certain information relating to their customers’ tax status.

If you open a new account with us or you are an existing client who invests in new financial products or change your circumstances in some way, we will ask you to certify a number of details about yourself. This process is called ‘self-certification’ and we are required to collect this information under the CRS.

If your circumstances change, you can notify us by uploading your up-to-date verification documents via the TBanque platform or by opening a case in our Customer Service Center.
You can also access your tax ID information by clicking on Settings, then on Account, and then on Tax ID.

In line with CRS requirements, we ask you for your:

• Name
• Address
• Place of birth
• Date of birth 
• Country(ies) and jurisdiction(s) of tax residence
• Taxpayer identification number(s)*
• Place of registration/incorporation (for Entities)
• Entity Type** (for Entities)
• Controlling Person Type for certain Entity Types (for Controlling Persons)

*This does not apply in all participating countries/jurisdictions and is subject to local legal requirements.

**TBanque collects corporate clients’ tax self-certifications via the corporate account opening form. Defining the entity type for CRS self-certification purposes can be a complex process that may require independent tax advice. TBanque cannot and does not provide tax advice, but TBanque’s FATCA and CRS guide may help you to establish your entity type for CRS purposes when you open a corporate account. 

TBanque cannot and does not provide tax or legal advice to its clients. Usually, your tax residence will depend on where you live and other circumstances. Tax residency rules may differ between different tax jurisdictions. Please contact an independent professional tax advisor or check the OECD website for more information on how to determine your tax residency. 

We are required by law and regulations to verify the details you have provided as part of your self-certification. We may ask you for a copy of your passport to verify your identity, or for other relevant evidence of the tax residency declared in your self-certification.

You can access the updated list of CRS-related commitments by clicking the link below:

• http://www.oecd.org/tax/transparency/AEOI-commitments.pdf

You can access the updated list of jurisdictions that have already committed to exchange information (‘CRS participating’) with other countries by clicking the link below:

• http://www.oecd.org/tax/automatic-exchange/crs-implementation-and-assistance/crs-by-jurisdiction/#d.en.345489

You can access the updated list of jurisdictions with which the UK has already committed to exchange information by clicking the link below:

• https://www.gov.uk/hmrc-internal-manuals/international-exchange-of-information/ieim402340

You can access the updated list of jurisdictions with which Cyprus has already committed to exchange information by clicking the link below:

• https://www.mof.gov.cy/mof/TAX/taxdep.nsf/All/4B9DA9990CCDB191C225825800371A69/$file/LIST%20OF%20PARTICIPATING%20JURISDICTIONS%202018.pdf?OpenElement

Notes:

• As per Australian rules on CRS implementation, TBanque AUS Capital Limited clients must be reported to the Australian Taxation Office (ATO) whether or not they are tax residents in a CRS participating jurisdiction.

• TBanque (Europe) Ltd. clients who are not tax residents in CRS participating jurisdictions are not reported to the Cyprus tax authority.

• TBanque (UK) Ltd. clients who are not tax residents in CRS participating jurisdictions are not reported to HM Revenue & Customs.

• TBanque is entitled to collect and store data on all clients’ countries of tax residency, whether or not they are tax residents in a CRS participating jurisdiction.

Under the CRS, we are legally required to establish the tax residency status of all our customers, even if you are tax resident in the same country as the one in which you hold your account. However, typically your details will not be reportable to the tax authorities for CRS purposes.

• All TBanque Group entities are entitled to collect and store data on their clients’ countries of tax residency.
• As per the local rules on CRS, all TBanque AUS Capital Limited clients are reported to the Australian Taxation Office whether or not they are tax residents in a CRS participating jurisdiction.  
• TBanque (Europe) Ltd. and TBanque (UK) Ltd. clients who are not tax residents in CRS participating jurisdictions will not be reported to the Cyprus tax authority or HM Revenue & Customs.

• For clients of TBanque (Europe) Ltd., the above information will be reported to the Cyprus Tax Department. 
• For clients of TBanque (UK) Ltd., the above information will be reported to HM Revenue & Customs in the United Kingdom.
• For clients of TBanque AUS Capital Limited, the above information will be reported to the Australian Taxation Office.

The general rule is that local financial institutions report CRS-specific information to their Competent Tax Authority, which in turn exchanges this information with the respective Competent Authorities of the Participating Jurisdictions with which they have an agreement in place.

TBanque is required to report your tax details in accordance with the regulatory obligations introduced by countries participating in the CRS.

We report both personal information (for example, name, address, US taxpayer identification number), and financial information (for example, account number, account balance, amounts paid into the account), as per CRS reporting rules. 

Please note that under CRS rules, we report the same commonly agreed numbers for all clients who are tax residents in more than 100 different tax jurisdictions participating in the CRS. These are not necessarily the figures you should be taxed on under your local tax rules. 

Specifically, under CRS rules, we must report only realised profits credited to your account during the reportable period (positions closed at a profit). That means we are not allowed to deduct the gross proceeds debited (positions closed at a  loss).

Please note that  the ‘Trade Profit or Loss (Closed positions only)’ figure on the first page of the TBanque account statement shows the net position for the year, i.e., gross proceeds both credited and debited to the account. 

On the ’Closed Positions’ page of your TBanque account statement, you can find the line by line analysis of the gross proceeds credited and debited to the account.

We cannot provide advice on what you should report in your tax return under your local tax laws and regulations. It is each client’s obligation to report their tax liability in due time to their tax authorities as per local tax rules. 

Please note that the TBanque account statement is not a tax statement. However, you may use information from your account statement to calculate the taxable income that you may need to include in your tax return.

Once a year, according to the schedule of the relevant tax authority.

The information exchange is our direct obligation, as it is of any other financial institution based in the CRS-participating jurisdictions. If your country of tax residence is not participating in the exchange, your data will not be shared, unless you are a client of TBanque AUS Capital Limited, which is a company regulated in Australia, where financial institutions (such as TBanque AUS Capital Limited) are required to report on all its clients, irrespective of their country of tax residence.

The Reporting Standard was developed in response to the G20 request and approved by the OECD Council. The Standard is governed by each participating jurisdiction and is not in breach of GDPR policies.

TBanque respects your data privacy. We only disclose your information to the relevant tax authorities if we are legally required to do so.

Customer information is protected by strict security measures to which all members of the TBanque Group, their staff and third parties are subject.

All financial institutions in participating countries, including banks, insurers and asset management businesses, are required to be compliant with the CRS.