FATCA stands for Foreign Account Tax Compliance Act of U.S. tax laws.
It is required to confirm whether the customer is "U.S. person subject to U.S. tax laws" for Foreign Financial Institutions (FFIs) in order to prevent tax evasion using their financial accounts outside of the United States.
Based on the statement between the U.S. Department of the Treasury and the Authorities of Japan (*1), Japanese financial institutions confirm whether the customer is "U.S. person". If the customer is "U.S. person", Japanese financial institutions are required to report the customer account information to the Internal Revenue Service(IRS) every year with customer's consent.
- (*1)Statement of Mutual Cooperation and Understanding between the U.S. Department of the Treasury and the Authorities of Japan to Improve International Tax Compliance and to Facilitate Implementation of FATCA
«Customers who is considered U.S. person subject to U.S. tax laws»(Customers subject to reporting to IRS)
[For Individual]
- US citizens (customers with nationality of the United States)
- Green card holders (customers with permanent residency in the United States)
- Customers residing in the United States
Generally, it is considered to be resident in the United States under the following conditions*:
If your period of residence in the United States for this year is 31 days or more and the total of the following is 183 days or more.- The length of days you resided in the U.S. of the declaration year
- 1/3 of the length of residence days last year
- 1/6 of the length of residence days the year before last
- *The conditions may differ depending on the VISA type, etc.
[For Corporation]
- Corporations established in the United States
- Financial institutions that do not participate in FATCA framework
- Corporations which main business is investment business, and which have US shareholders, equity holders who hold more than 25% of voting rights or value.
If you are unsure whether you meet the conditions of "U.S. person subject to U.S. tax laws", please contact to tax accountant, accountant, or other specialists.