The Foreign Account Tax Compliance Act (FATCA) is the American law that combats tax evasion by American taxpayers worldwide. On the basis of this law as well as agreements between the Dutch and American governments, banks must determine whether customers fall under these regulations. These regulations involve customers of Dutch banks being required to provide information to the bank.
- The FATCA requires financial institutions outside of the United States to report data about American taxpayers. The Dutch and American governments have made agreements via an Intergovernmental Agreement with which Dutch banks are also required to comply.
- Dutch banks are required to determine whether a customer falls under the American regulations and, if so, must provide information to the Netherlands Tax and Customs Administration annually.
- Dutch banks may not deviate from these rules. Dutch legislation contains sanctions for banks if they do not fulfil the obligations.
What does this mean for customers?
Banks are required to determine whether, on the basis of the American and Dutch regulations, a customer is a so-called 'U.S. person'. This obligation applies to both new and existing customers and entails that customers must provide the bank with information if they (wish to) maintain a customer relationship. For customers, this means that they must comply with a bank's request to provide information.
Which information must banks provide?
On the basis of the reporting obligations, banks must provide the following details of their customers to the Dutch Tax and Customs Administration: name, address, account number, Social Security Number or other Taxpayer Identification Number, balance of the account(s), the interest and dividends received as well as revenue from the sale, repayment or buyout of assets.
Where can you find more information and support?
The NVB and the Dutch banks are no advisers in the subject of American rules en legislation. Being a so-called U.S. person can mean that a tax return must be filed in America and that an American Social Security Number (‘SSN’) or Individual Taxpayer Identification Number (ITIN) must be obtained. If you have questions about the topics above or about your own situation, we advise you to contact a tax advisor specialised in American tax law.