The definition of investment entities under FATCA, under the model IGA and under the UK IGA, regulations, guidance notes varies in important respects. Andrey Krahmal (Temple Tax Chambers) provides a summary of how the rules apply to investment entities most frequently encountered in practice.
The Foreign Account Tax Compliance
Act (FATCA) requires non-US entities to register with the IRS and to conduct diligence and reporting on their investors and account holders. FATCA threatens foreign i.e. non-US financial institutions (FFIs) with a 30% withholding tax on their US source income and sale proceeds unless they enter into an agreement with the IRS. Many countries have entered into intergovernmental agreements (IGAs) with the US that provide relief...
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