What is FATCA

FATCA (Foreign Account Tax Compliance Act) is the acronym for USA law named "Law for tax compliance of foreign accounts", which requires reporting by foreign financial institutions (registered in another country than USA) of USA customers, including those living outside USA, to the USA fiscal authorities (IRS - Internal Revenue Service).

FATCA was implemented in the national regulatory framework by Law no. 233/2015 on ratifying the Agreement between Romania and the United States of America for international tax compliance improvement and FATCA implementation, signed in Bucharest on May 28, 2015. Other legal provisions in force that regulates the financial institutions' obligation to provide the competent fiscal authority - NAFA with information regarding the resident taxpayers of the states to which Romania is committed based on a legal instrument of international law, also include:

  • Law no. 207/2015 regarding the Fiscal Procedure Code (art. 62);
  • Order no. 1939/2016 issued by the Ministry of Public Finance (MPF) establishing the financial institutions that have reporting duties, type of information for taxpayers identification, as well as financial information related to their opened and/or closed accounts at the financial institutions, non-reporting Romanian financial institutions and the excluded accounts, the compliance rules applicable to these financial institutions for identifying the reportable accounts and also the reporting procedure of this information, including rules and administrative procedures aiming to ensure implementation and compliance with the reporting procedures and tax diligence rules provided in the international legal instruments of international law to which Romania is committed.

Since when is FATCA applied?

FATCA applies starting with July 1, 2014.


Which is the purpose of FATCA?

FATCA was issued in order to prevent tax evasion, through tax avoidance by US taxpayers, using opened accounts at financial institutions outside USA or offshore investment instruments.

According to FATCA requirements, financial institutions outside USA (Banca Romaneasca, member of the National Bank of Greece Group - "the Bank" falling into this category) must:

• identify and obtain information about customers that could be framed as US persons, based on specific criteria, known as "US indicia" (USA indicia). This information is necessary to establish which are the US reportable customers;

• annualy report to the US fiscal authorities, specific information related to the accounts opened/closed by US residents, foreign entities with substantial US shareholders, as well as customers classified as "undocumented/recalcitrants". Whereas Romania has implemented FATCA within the national regulatory framework, the Bank will annualy report the previously mentioned information to the National Agency for Fiscal Administration - NAFA.

To whom are FATCA requirements applied?

FATCA requirements are applied to all US customers (individuals or legal persons controlled by US citizens), whether they are inside or outside the US.

Terms used in accordance with FATCA provisions

US person:

  • a citizen or a resident individual in US;
  • a partnership or a corporation organised under the laws of the US or located in any US state;
  • a trust, if: (i) a US court would have the authority under the applicable law to issue orders or judgments substantially related to all issues concerning trust administration and (ii) one or more US persons have the authority to control all substantial decisions of the trust or the inheritance assets of a deceased person who was a citizen or resident of the US (according to the US Internal Revenue Code).

What are USA indicia (US indicia)?

US indicia represent information provided by customers that may lead to frame as US person an individual or a legal person.

- For individuals these indicia are:

• US citizenship or US residency (this includes a Green Card issued by the US authorities);

• US place of birth;

• US present address (correspondence address, home address, residence address, mailbox address - PO Box);

• The sole address of the person, held by the bank, is "in care-of" or "hold mail" address;

• US telephone number;

• Power of attorney or signatory authority, currently valid, granted to a person with US address (home, residence, mailbox);

• Standing instructions for funds transfer from an account held by the Bank to a US based account.

- For legal persons, these indicia are:

• The entity is established in the USA;

• The entity has its registered office or mailing address in the USA;

• The entity has US direct/indirect shareholders/controlling persons (individuals or entities).

Identifying any of these indicia by the Bank, does not lead to automatic framing as a US person, but customers will be requested specific information or additional supporting documents based on which the Bank will determine the status of each client. Information and/or documents will be presented to the Bank within the requested deadline.

For further information, the web site www.irs.gov can be accessed in order to verify a possible framing to the status of US person and/or US resident for tax purposes.

In accordance with Law no. 207/2015 regarding the Fiscal Procedure Code, as amended and supplemented, Banca Românească S.A. collects its customers' personal data as stipulated in art. 291 para. 4 in order to select and transfer them in accordance with art. 62 and Chapter I, Title X of the same Law. This information is:

1.a. the name, address and US Taxpayer Identification Number (TIN) of each account holder that is a specified US Person (or date of birth);

1.b. the name, address and US Taxpayer Identification Number (TIN) of every US entity and of each US Person if this is about a US owned foreign entity that is identified as having one or more persons that exercise the control of such entity that is/are US person(s);

2. the account number;

3. the account balance or the account value held by the account holder at year end or, if the account was closed during that year, the last transaction value immediately prior to closing the account;

4. the total gross amount of the interest / dividends / other earnings on the assets held in the account / total gross earnings from the sale or redemption of property paid or credited to the account during the year;

5. the amount of payments to each non-participating financial institution.

What does USA/US mean?

USA/US means the United States of America, including its member States, but not including USA territories (American Samoa, the Northern Mariana Islands Federation, Guam, Puerto Rico Federation or the US Virgin Islands of the United States).

What is the identification number of the taxpayer?

Federal taxpayer indentification number from the USA (TIN - Taxpayer Identification Number); TIN for individuals is called SSN (Social Security Number), and TIN for legal persons is called EIN (Employer Identification Number).

What is a Non-Financial Foreign Entity (NFFE)?

A NFFE is a legal entity outside USA that is not a financial institution. There are two categories of NFFE:

  • Active NFFEs, are entities involved in active transactions or business (manufacturing, industry, non-financial services etc.) where less than 50% of gross income in the previous year is passive. This is a FATCA status.

For example, a garment factory produces clothing and has no other income besides the one obtained from this activity.

  • Passive NFFEs, entities that have a passive income that exceeds 50% of the gross income (such as dividents, interest, rents, royalties, annuities). This is a FATCA status.

For example, a garment factory has a large portofolio of investments and achieves higher income from financial investments than from business activity.

Undocumented / Recalcitrant customer - customer (for) which, in order to apply FATCA by the Bank:

- has not responded to the request for filling in the FATCA documentation,

- US indicia about the Customer where found and these indicia where not confirmed nor denied by the Customer.

Clients that will be framed as being undocumented/recalcitrants will also be reported to NAFA.

Forms used in case there is a US indicia

Individuals:

W-9 Form - Request for Taxpayer Identification Number and Certification (tax identification number request) - is a document of the US Tax Service (Internal Revenue Service - IRS) that will be filled in by the individual customer in order to confirm and certify that he/she is US taxpayer. Instructions for filling in the W-9 form are available on IRS website: http://www.irs.gov/pub/irs-pdf/iw9.pdf

W-8BEN Form- Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding - has the purpose to identify non-US beneficial owners of the accounts and transactions. It is exclusively used by individuals to certify that they are not taxable in the USA. Instructions for filling in the W-8BEN form are available on IRS website: http://www.irs.gov/pub/irs-pdf/iw8ben.pdf

Legal persons:

W-9 Form - Request for Taxpayer Identification Number and Certification (tax identification number request) - is a document of the USA Tax Service (IRS) that will be filled in by the customer legal person in order to confirm and certify that it is a US taxpayer. Instructions for filling in the W-9 form are available on IRS website: http://www.irs.gov/pub/irs-pdf/iw9.pdf.

W-8BEN-E Form - Certificate of Status of Beneficial Owner for United States Tax Withholding Reporting (Entities) - has the purpose to identify non-US beneficial owners of the accounts and transactions. It is exclusively used by legal persons to certify that the beneficial owners are not taxable in the USA. Instructions for filling in the W-8BEN-E form are available on IRS website: http://www.irs.gov/pub/irs-pdf/iw8ben.pdf.

Applying the provisions of Law no. 677/2001 on the protection of individuals with regard to the processing of personal data and the free movement of such data

In context in which you are a resident taxpayer of a state to which Romania is committed based on a legal instrument of international law, the Bank will report to the tax authorities (N.A.F.A.) the information required under the legal provisions mentioned above and according to the procedure regulated by the Order of MPF no. 1939/2016.

Your personal data - name, address, tax identification number(s), date and place of birth, account number(s) - as defined by Law no. 677/2001 on the protection of individuals with regard to the processing of personal data and the free movement of such data, as amended and supplemented, were obtained at the time of opening your Bank account(s).

In order to achieve the mentioned goals, the Bank will process your personal data for the entire duration of the Bank's activities.

Processing of personal data is performed with the purpose of running the contractual relationship between you, as a user of services and the Bank, as provided by the applicable law.

You benefit from the rights provided by Law no. 677/2001 on the protection of individuals with regard to the processing of personal data and the free movement of such data, as amended and supplemented, in particular the right of access to data, information, modify the data and opposition right, the right not to be subjected to an individual decision, the right to address to the National Supervisory Authority for Personal Data Processing or justice, rights which may be exercised within legal limits.

To exercise the above rights, as well as any other information relating to the processing of personal data, individuals can submit a written request, dated and signed, to Banca Romaneasca S.A. Member of National Bank of Greece Group, Bucharest, George Constantinescu street no. 3, floors 1, 2 and 3, district 2.

Banca Romaneasca's Witholding certificate (W8-Form) can be downloaded by following this link.