Client tax information

FAQs answered and tax terms explained

We're committed to increasing awareness of client tax information regulations and requirements

FATCA

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.

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.

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.

When did FATCA come into effect?

FATCA came into effect on 01 July 2014.

FATCA Glossary

US Person

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.

US Citizen

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.

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.

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.

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.

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).

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.

Financial account

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.

Beneficial owner

Generally, the person/entity that has beneficial ownership of assets or the beneficial owner to income.

CRS

What is CRS?

CRS is a global standard for the automatic exchange of financial information between jurisdictions where it is in effect. The Organisation for Economic Co-operation and Development (OECD) introduced 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 on 01 January 2017.

In which countries does CRS apply?

More than 100 jurisdictions have adopted CRS.

The full list of countries that have committed to the implementation of CRS is available on the OECD website.

How will Standard Chartered collect your tax information and report under CRS?

Under CRS, financial institutions (FIs) such as Standard Chartered (the Bank) in participating jurisdictions must collect certain information regarding 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.

 

FIs will report information on financial accounts held by clients who are tax residents in other reportable jurisdictions to the designated local authorities. The information then will be exchanged annually by the local authorities with the designated authorities in each reportable jurisdiction with which a relevant information sharing agreement has been entered. In participating jurisdictions, compliance is mandatory under local law.

When does CRS reporting begin?

Generally, financial institutions in early adopter jurisdictions will commence reporting to the local tax authority in March 2017.

 

In late adopter jurisdictions, reporting will commence in March 2018. The first exchange of information between tax authorities is expected to be 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 is your reportable information under CRS?

Generally, the reportable information* includes:

  • Name;
  • Address;
  • 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 a joint account that is held by a reportable person and non-reportable person, the entire account is treated as a reportable account. Reportable information relating to the account and the reportable person will be submitted to the designated local tax authorities in accordance with local legislation.

How does CRS affect your relationship with the Bank?

To comply with the obligations under 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 designated local tax authority where the account is maintained and in accordance with the local legislation.

 

Specifically, for holders of pre-existing accounts, you may be required to complete an applicable CRS form. 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).
  • Without a valid CRS form, both new clients and pre-existing clients who wish to open a new financial account with the Bank, may not be able to do so.

You should be aware that in providing the certification, a statement that is false, misleading or incorrect may be regarded as an offence and, therefore may be subject to penalties under relevant law or regulation.

How should you determine your country (or countries) of tax residence for purposes of CRS?

There is general information regarding tax residence provided by the Organisation for Economic Co-operation and Development (OECD).

 

For assistance in determining 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 are 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 numbers 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, and the United Arab Emirates (UAE). Other countries issue TINs only to entities, but not to individuals; such countries include: Kuwait, 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, the Unique Entity Number (UEN) in Singapore, and the Business Registration Identity Card Number (BRID) 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 India, Permanent Account Number (PAN) serves as a TIN for individuals. In the UK, it is the National Insurance Number (NINO), or the Unique Taxpayer Reference (UTR).

 

In Singapore, it is the National Registration Identity Card Number (NRIC), Foreign Identification Number (FIN), Tax Reference Number Assigned by IRAS (ASGD) or the Income Tax Reference Number (ITR).

 

In Hong Kong, it is the Hong Kong Identity Card Number (HKID). The above examples are not meant to be exhaustive, nor does it constitute tax advice. If you need help determining your TIN, please seek professional tax or legal advice.

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. Under this certification, you, as an account holder, must 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 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 CRS. Further, 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. Where CRS reporting obligations arise, we may be further 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.

You have previously provided information under the Foreign Account Tax Compliance Act (FATCA). Why is the Bank asking you to provide more information under CRS?

CRS and FATCA are separate regulatory requirements. The Bank is obligated to comply with both client tax information regimes.

What is the difference between CRS and FATCA

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 CRS targets offshore tax evasion based on an account holder’s country (or countries) of tax residence.

CRS Glossary

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.

 

Read further details on the OECD website

 

Some jurisdictions do not issue a TIN. However, these jurisdictions often utilise some other high integrity number with an equivalent level of identification (a ‘functional equivalent’).

 

Examples of that type of number include, for individuals, a social security/insurance number, citizen/personal identification/service code/number, and resident registration number.

Reportable Person

A Reportable Jurisdiction Person 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 in clause (1);
  • a Governmental Entity;
  • an International Organisation;
  • a Central Bank; or
  • a Financial Institution.

Reportable Jurisdiction

A Reportable Jurisdiction is a Participating Jurisdiction with which an obligation to provide financial account information is in place.

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.

Reportable Account

A Reportable Account is a Financial Account that is maintained by a Reporting Financial Institution and that, pursuant to due diligence procedures consistent with 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.

Participating Jurisdiction

A jurisdiction:

  • with which an agreement is in place pursuant to which it will provide the specified information under CRS; and
  • which is identified in a published list.

International Organisation

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.

Financial Institution

Any of the following:

  • A Depository Institution;
  • A Custodial Institution;
  • An Investment Entity; or
  • A Specified Insurance Company.

Financial Account

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.

Controlling Person

The natural persons who exercise control over an Entity. In the case of a trust, such term means the settlor(s), the trustee(s), the protector(s) (if any), the beneficiary(ies), or class(es) of beneficiaries, and any other natural person(s) exercising ultimate effective control over the trust, and in the case of a legal arrangement other than a trust, such term means persons in equivalent or similar positions.
 
The term ‘Controlling Person’ shall be interpreted in a manner consistent with the Recommendations of the Financial Action Task Force.

Competent Authority Agreement (CAA)

In general, a Competent Authority Agreement is a bilateral agreement between two jurisdictions to clarify or interpret CRS treaty provisions.

Change-in-Circumstances

A Change-in-Circumstances refer to a change on a client banking profile which impacts one or more of the CRS Indicia data indicators.

Account Holder

The term ‘Account Holder’ 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.

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.