In general, an FFI will enter into an agreement (referred to as “FFI Agreement”) with the U.S. Department of Treasury (U.S. Treasury) by which the FFI can avoid FATCA withholding on payments it receives (and become a participating FFI). Generally, an FFI Agreement requires a determination of which accounts are “United States accounts” (see # 5), compliance with verification and due diligence procedures, annual reporting on those United States accounts to the U.S. Treasury (see below), compliance with additional IRS reporting requests and withholding of 30% where applicable (e.g., recalcitrant account holders, non-participating FFIs).
FFI’s that enter into an FFI agreement with the IRS will need to report the following information on their U.S. accounts:
- The name, address and Taxpayer Identification Number (TIN) of each account holder which is a specified United States person and, in the case of any account holder which is a United States owned foreign entity, the name, address and TIN of each substantial United States owner of such entity;
- The account number;
- The account balance or value at year end (to be confirmed by Regulations); and
- Gross dividends, interest and other income paid or credited to the account (timing will be determined in the FFI agreement).