FATCA

Multibank and subsidiaries wish to inform you that as of July 1, 2014, the Law of Fiscal Enforcement of Accounts Abroad or FATCA (Foreign Account Tax Compliance Act) comes into force. This law was enacted into law in the United States on March 18, 2010. Their intention is to prevent U.S. taxpayers to use financial accounts outside the U.S., in order to evade taxes.

In April of this year, the Ministry of Economy and Finance of the Republic of Panama, advised that it had completed the process of IGA* negotiations (Intergovernmental Agreement) with the United States of America; it still remains pending for signature, however, with the closure of these negotiations, Panama is included as of May 1, 2014, among the jurisdictions that have reached substantial agreements.

With this substantial IGA, Financial Institutions of Panama must provide financial information of their clients identified as U.S. persons or companies “U.S. Person” (1), to the tax authorities of Panama and these in turn to the Internal Revenue Service of the United States (known by its acronym as the IRS).

Position of Multibank and subsidiaries regarding the FATCA Law

Multibank and subsidiaries, always committed to comply with all obligations imposed by the regulations required to their financial activity, has made the necessary adjustments to their processes to meet these obligations in the most efficient way possible as of July 1, 2014, when this Law shall take effect.

FATCA impact to client:

  • If the person or company is not American, it will not have any impact.
  • If the person or entity is a “U.S. Persons” or has any indicia (2) it must fill out the documents requested by the bank through its account officer.
  • If you have renounced to U.S. citizenship, you must present documents proving said assertion.


For more information about FATCA, you can go to the website at: http://www.irs.gov/Businesses/Corporations/Foreign-Account-Tax-Compliance-Act-FATCA

(1) US Person: It is a U.S. citizen or an individual who is a resident of the U.S., a partnership or corporation organized in the United States or under the laws of the United States or any of its states.

(2) Indicia: Legal term meaning indication. In FATCA’s context, indicia refer to evidence or indications that the account holder may be a U.S. Person.



CRS

Multibank, in accordance with banking regulations and national and international norms and laws, established in the area of fiscal transparency, adheres to the implementation of the Common Reporting Standard (CRS), according to Law 51 of October 27, 2016 of the Republic of Panama, in force as of January 1, 2017.

The Common Reporting Standard (CRS) is the global standard for the Automatic Exchange of Information on Financial Accounts (AEOI) developed by the OECD, which requires a self-certification of the tax residence to be performed by account holders for its implementation, i.e. the country where they declare their tax (applicable for new or pre-existing clients).

In addition, it defines rules for financial institutions to identify the persons subject to reporting and to inform the competent local authority. In Panama, the designated entity is the Dirección General de Ingresos (DGI).

https://dgi.mef.gob.pa/Tributación-I/C-Firmados.html

Links
CRS
Law 47 of October 24, 2016
Law 51 of October 27, 2016
Resolution Nº 201-393 of 29 June 2017

Documents
Legal Person CRS Certification
Natual Person CRS Certification
CRS – Frequently Asked Questions

Note: This information is for information purposes only and does not constitute or should be considered as tax or legal advice, so we recommend that if you have any questions or concerns, you seek advice from an expert in the field.