Client tax information
FAQs answered and tax terms explained
We're committed to increasing awareness of client tax information regulations and requirements
What is FATCA?
FATCA is United States (US) legislation that came into effect on 1 July 2014 and that seeks to prevent tax evasion by US Persons through the use of accounts held outside the United States. FATCA requires financial institutions outside of the US to collect information about their clients’ tax status under FATCA and report annually, information on financial accounts held by US Persons to the US IRS or the relevant tax authority.
Are we participating in FATCA?
We are participating in FATCA and have registered subsidiaries of Standard Chartered that meet the definition of a Foreign Financial Institution (FFI) with the United States (US) Internal Revenue Service (IRS). We will carry out the due diligence, reporting and withholding tax requirements of FATCA in accordance with any relevant Intergovernmental Agreement (IGA) and local legislation.
Will we be reporting your information to the United States Internal Revenue Service?
If you are a United States (US) Person, an entity incorporated in the US, or a US beneficial owner of certain categories of entities (as defined in the FATCA regulations), then we may be obligated to report, on an annual basis, information regarding financial accounts held by you to the either the US tax authority, the Internal Revenue Service (IRS), or a local tax authority in accordance with Intergovernmental Agreement (IGA) that has been entered into between the US and the country’s governing authority.
Will we be withholding tax on any of your US source payments?
We are obligated to withhold tax on United States (US) source payments to Foreign Financial Institutions (FFIs) that are not participating in FATCA (non-participating FFIs) and on payments to clients who do not provide the required documentation (recalcitrant account holders) in accordance with the FATCA regulations from 01 July 2014.
Will we still require documentation from you for FATCA if you do not have any US connections?
As an individual client, there are occasions where we may require from you US tax forms even if you are not a US Person. It may be that there is some information in the documentation that indicates US status and therefore further due diligence is required.
We will require US tax forms from all entity clients. The form certifies whether or not, you or your business, has any US tax reporting responsibilities. If this tax information is not received from you, please note that we may be required to withhold tax on certain US source payments.
Where can more information on FATCA be found?
You can find out more about the regulatory obligations related to FATCA on the United States (US) Internal Revenue (IRS) FATCA webpage.
When did FATCA come into effect?
FATCA came into effect on 01 July 2014.
How did FATCA come about?
Arising from concerns of tax evasion by US Persons, US congress enacted FATCA in 2010 to target non-compliance by US taxpayers using foreign accounts.
Generally, the person/entity that has beneficial ownership of assets or the beneficial owner to income.
A Financial Account is an account maintained by a Financial Institution and includes: Depository Accounts; Custodial Accounts; Equity and debt interest in certain Investment Entities; Cash Value Insurance Contracts; and Annuity Contracts.
Foreign Financial Institution
Generally, any non-US financial institution that includes, but is not limited to an organisation that:
Accepts deposits in the ordinary course of a banking or similar business (depository institution);
- Holds, as a substantial portion of its business, financial assets as a custodial institution;
- Engages or being engaged primarily in the business of investing, reinvesting, or trading in securities, partnership interests, commodities, or any interest in such products;
- Conducts certain business as an insurance company
Note: FFIs may also refer to certain holding companies and treasury centres in non-intergovernmental agreement (IGA) jurisdictions.
Intergovernmental Agreement (IGA)
A bilateral agreement signed between the US government and a foreign government regarding the implementation of FATCA. Broadly, these IGAs are categorised as either Model 1 or Model 2. Foreign Financial Institutions (FFIs) in Model 1 jurisdictions are required to report to the local tax authorities who in turn report to the US IRS whereas FFIs in Model 2 jurisdictions are required to report FFIs directly to the United States (US) Internal Revenue Service (IRS).
Internal Revenue Service (IRS)
The IRS is the tax authority of the United States (US). They are the final recipients of all reporting which Financial Institutions provide as a result of FATCA.
Non-Participating Foreign Financial Institution (NPFFI)
A Foreign Financial Institution (FFI) that does not comply with the FATCA provisions. This category may also apply to entity clients that do not participate with the FATCA regulations, including not cooperating with requests for forms.
Recalcitrant Account Holder
An account holder may become recalcitrant if they do not provide the documentation and/or information as required to confirm their FATCA status.
A United States (US) Citizen can be defined as the following:A United States (US) Citizen can be defined as the following:
- A person who was born in the US (provided they haven’t renounced their US citizenship);
- A person who holds a US passport;
- A person who is a naturalized citizen of the US.
A United States (US) Person can be defined as the following:A United States (US) Person can be defined as the following:
- A citizen or resident of the United States;
- A domestic partnership;
- A domestic corporation;
- Any estate other than a foreign estate;
- Any trust if:
- A court within the United States is able to exercise primary supervision over the administration of the trust, and
- One or more United States persons have the authority to control all substantial decisions of the trust;
- Any other person that is not a foreign person.
Will your CRS form expire after it has been submitted to the Bank?
The CRS form will remain valid unless there is a change in circumstances which affects your tax residence status or where any information provided in the form becomes incorrect. In providing the CRS form to the Bank, you, as an account holder, are certifying that you will inform the Bank within 30 days of any such change in circumstances.
What happens if you do not respond to our request for tax information under the CRS?
If you do not respond to our request for information, we may need to treat your account as a reportable account for purposes of the CRS. This means that we may be obliged to report information regarding financial accounts held by you to the designated local tax authority in accordance with local legislation of the participating jurisdiction where the financial account is maintained. The local tax authority may exchange this information with the tax authority of another country in accordance with relevant laws.
In addition, we may, in certain circumstances, decline any requests for new accounts, decline to enter into any further transaction with you, and/or close your existing account(s) with us.
You have previously provided information under the Foreign Account Tax Compliance Act (FATCA). Why is the Bank asking you to provide more information under the CRS?
What is the difference between the CRS and FATCA?
The CRS and FATCA both target offshore tax evasion and require financial institutions to identify clients’ tax statuses, monitor clients for change in circumstances and report clients’ account details, as applicable.
However, FATCA focuses only on tax evasion by US Persons, whilst the CRS targets offshore tax evasion based on an account holder’s country (or countries) of tax residence.
Where can more information on the CRS be found?
More information on the CRS can be obtained from:
The Bank’s CRS page
What is the CRS?
The CRS is a global standard for the automatic exchange of financial information between jurisdictions where it is in effect (“participating jurisdictions”). The Organisation for Economic Co-operation and Development (OECD) introduced the CRS in order to combat tax evasion and to improve cross-border tax compliance. It came into effect for early adopter jurisdictions on 01 January 2016 and in late adopter jurisdictions from 01 January 2017.
In which countries does the CRS apply?
More than 100 jurisdictions have adopted the CRS.
The full list of jurisdictions that have committed to the implementation of the CRS is available on the OECD website.
How will Standard Chartered collect your tax information and report under the CRS?
Under the CRS, financial institutions (FIs) such as Standard Chartered (the Bank) in participating jurisdictions must collect certain information regarding a client’s status and country (or countries) of tax residence, and for certain types of entity clients, the country (or countries) of tax residence of the individual(s) who control them. In participating jurisdictions, compliance by FIs with the CRS is mandatory under local law.
FIs must report information on each financial account held by clients who are tax residents in other reportable jurisdictions to the tax local authorities in the country where the account is held. This information then will be exchanged annually by that tax authority with the tax authority in each reportable jurisdiction in which the client is tax resident.
When did CRS reporting begin?
Financial institutions in early adopter jurisdictions commenced reporting to the local tax authority from March 2017.
In late adopter jurisdictions, reporting commenced from March 2018 onwards. The first exchange of information between tax authorities was in September 2017 for early adopter jurisdictions, and September 2018 for late adopter jurisdictions.
The list of signatories of the CRS multilateral Competent Authority Agreement (CAA) contains the countries and corresponding timelines for the first information exchange.
What information is reportable under the CRS?
Generally, the reportable information* includes:
- Country (or countries) of tax residence;
- Taxpayer Identification Number (TIN);
- Date and place of birth (for individuals or Controlling Persons);
- Account number;
- Account balance;
- Certain payments made into the account.
*Note that these may be subject to change under local legislation or guidance.
For an account that is jointly held by one or more reportable persons and one or more non-reportable persons, the entire account is treated as a reportable account. Reportable information relating to the entire account and each reportable person will be submitted to each designated local tax authorities in accordance with local legislation or guidance.
How does the CRS affect your relationship with the Bank?
To comply with its obligations under the CRS, the Bank may be required to collect certain tax-related information and/or documents from the holders of new and pre-existing accounts. In addition, the Bank may be required to report and share information regarding account holders and their financial accounts with the local tax authority where the account is maintained and in accordance with the local legislation.
In order to enable the Bank to comply with these obligations, you may be required to complete an applicable CRS form. Without a valid CRS form it may not be possible for you to open a new account with the Bank. You can download these from the Bank’s CRS page .
The CRS forms may also be obtained from:
- a Standard Chartered branch;
- your Relationship Manager (if applicable).
You should be aware that in providing the certification contained in the CRS Form, a statement that is false, misleading or incorrect may be regarded as an offence and, therefore may be subject to penalties under relevant laws or regulations.
How should you determine your country (or countries) of tax residence for purposes of the CRS?
The Organisation for Economic Co-operation and Development (OECD) provides general information regarding tax residence.
If you need any further assistance to determine your country (countries) of tax residence or in completing the relevant CRS forms, please seek professional tax or legal advice. Neither the Bank nor any of its employees is able to assist in these matters.
What is a Taxpayer Identification Number, and do all countries issue such a number?
A Taxpayer Identification Number, or TIN, is a unique combination of characters assigned by a country’s tax authority to a person (individual or entity) and used to identify that person for the purposes of administering the country’s tax laws.
Some countries do not issue a TIN in any situation; such countries include Bahrain, Bermuda and the United Arab Emirates (UAE). Other countries issue TINs only to entities, but not to individuals; such countries include Sri Lanka, Oman, and Qatar. In other countries, whilst TINs may be issued to both individuals and entities, individuals or entities in particular situations may not be issued with a TIN.
In some countries, another high integrity number with an equivalent level of identification (a functional equivalent) may be used instead of a TIN to identify a particular person.
- For entities, such functional equivalent TIN types include, the Permanent Account Number (PAN) in India, and the Business Registration Number in Hong Kong;
- For individuals, such functional equivalents may include a social security/national insurance number, a citizen/personal identification/service code/number, or a resident registration number. For example:
- In the UK the National Insurance Number (NINO), or the Unique Taxpayer Reference (UTR) serves as a TIN for individuals;
- In Hong Kong, the Hong Kong Identity Card (HKID) Number serves as a TIN for individuals;
- In Pakistan, the Computerised National Identity Card (“CNIC”) serves as a TIN for individuals;
- In Guernsey, the social security number serves as a TIN for individuals.
The above examples are neither meant to be exhaustive, nor to constitute tax advice. If you need help to determine your TIN, please seek professional tax or legal advice.
The term ‘Account Holder’ generally means the person listed or identified as the holder of a Financial Account. A person, other than a Financial Institution, holding a Financial Account for the benefit of another person as an agent, a custodian, a nominee, a signatory, an investment advisor, an intermediary, or as a legal guardian, is not treated as the Account Holder. In these circumstances that other person is the Account Holder.
For example in the case of a parent/ child relationship where the parent is acting as a legal guardian, the child is regarded as the Account Holder. With respect to a jointly held account, each joint holder is treated as an Account Holder.
Any change which affects your tax residence status or where any information previously provided in a CRS form becomes incorrect.
(i) For corporations and other “legal persons” the “Controlling Persons” are:
(a) Natural persons (if any – as ownership interests can be so diversified that there are no natural persons (whether acting alone or together) exercising control of the legal person or arrangement through ownership) who ultimately have a controlling ownership interest (a controlling ownership interest depends on the ownership structure of the company. It may be based on a threshold, e.g. any person owning more than a certain percentage of the company (e.g. 25%)) in a legal person; and
(b) to the extent that there is doubt under (a) as to whether the person(s) with the controlling ownership interest are the beneficial owner(s) or where no natural person exerts control through ownership interests, the natural persons (if any) exercising control of the legal person or arrangement through other means.
(c) Where no natural person is identified under (a) or (b) above, the relevant natural person who holds the position of senior managing official.
(ii) For Trusts – the settlor, the trustee(s), the protector (if any), the beneficiaries or class of beneficiaries, and any other natural person exercising ultimate effective control over the trust (including through a chain of control/ownership)
(iii) Other types of legal arrangements (non-trust) – persons in equivalent or similar positions to the “Controlling Persons” of trusts.
For purposes of determining the Controlling Persons of an Account Holder, reference should be made to the AML/KYC Procedures pursuant to the anti-money laundering or similar requirements as implemented in the domestic law applies.
A Financial Account is an account maintained by a Financial Institution and includes: Depository Accounts; Custodial Accounts; Equity and Debt Interest in certain Investment Entities; Cash Value Insurance Contracts; and Annuity Contracts.
Any of the following:
- A Depository Institution;
- A Custodial Institution;
- An Investment Entity; or
- A Specified Insurance Company.
Any international organisation or wholly owned agency or instrumentality thereof. This category includes any intergovernmental organisation (including a supranational organisation):
- that is comprised primarily of governments;
- that has in effect a headquarters or substantially similar agreement with the jurisdiction; and
- the income of which does not inure to the benefit of private persons.
A jurisdiction –
(i) with which an agreement is in place pursuant to which it will provide the specified information under the CRS as required on the automatic exchange of financial account information, and
(ii) which is identified in a published list.
A Reportable Account is a Financial Account that is maintained by a Reporting Financial Institution and that, pursuant to due diligence procedures consistent with the CRS, has been identified as an account that is held by one or more persons that are Reportable Persons with respect to another Jurisdiction or by a Passive NFE with one or more Controlling Persons that are Reportable Persons with respect to another Jurisdiction.
Reportable Client Information
Reportable Client Information refers to the account-level data which the Bank needs to report to the appropriate authority as part of the CRS requirements; this generally includes but is not an exhaustive list:
- Taxpayer Identification Numbers (TIN);
- Aggregate Account Balances;
- Client Name;
- Client Permanent Address.
A Reportable Jurisdiction is a Participating Jurisdiction with which an obligation to provide financial account information is in place and that is identified in a published list.
A Reportable Person is an entity that is tax resident in a Reportable Jurisdiction, other than:
• a corporation the stock of which is regularly traded on one or more Established Securities Markets;
• any corporation that is a Related Entity of a corporation described above;
• a Governmental Entity;
• an International Organisation;
• a Central Bank; or
• a Financial Institution (except for an Investment Entity located in a Non-Participating Jurisdiction and managed by another FI).
A Reportable Person is an individual who is tax resident in a Reportable Jurisdiction under the laws of that jurisdiction. Dual resident individuals may rely on tiebreaker rules contained in tax conventions (if applicable) to solve cases of double residence for purposes of determining their residence for tax purposes.
Taxpayer Identification Number
Taxpayer Identification Number or a functional equivalent in the absence of a TIN. A TIN is a unique combination of letters or numbers assigned by a jurisdiction to an individual or an entity and used to identify the individual or entity for the purposes of administering the tax laws of that jurisdiction.
Nothing on this page constitutes tax advice. It's your responsibility to provide us with accurate tax information. For assistance in determining your country (or countries) of tax residence or tax status, or in completing the relevant tax forms, please seek professional tax advice or legal advice. Neither the Bank, nor any of the Bank's employees, are able to assist in these matters.