Trusts - Have you got the X-FATCA?
17 May 2017
Thousands of trusts are considered financial institutions under the US Foreign Account Tax Compliance Act (FATCA), and even more are considered to fall into the category under the Common Reporting Standard (CRS).
CRS will come into force on 1 July 2017, resulting in many Australian trusts needing to report more information about their beneficiaries to the ATO and their financial institutions.
If you have trusts you need to be aware that:
- Upon request, even when trusts are passive non-financial entities rather than financial institutions, they may still be required to provide financial details of beneficiaries
- Reporting requirements may fall on either the trust itself or the trustees
- This information will be passed on to the ATO and tax authorities in other jurisdictions
- There is no de minimis limit for trusts regardless of size and penalties exist for non-compliance.
Along with newly introduced obligations such as Country-by-Country reporting and the Diverted Profits Tax, this is one further tool available to the authorities in their increasing range of measures to make tax affairs more transparent.