FATCA Notice

19 December 2014




The Cyprus government reached an agreement with the United States on 2 of December regarding “Foreign Accounts Tax Compliance Act” FATCA. In this respect the agreement (IGA) places an obligation on non-US financial institutions (such as CyproFund Administration Services Ltd “CPF”) to identify and disclose certain information held by US residents/US citizens to US Internal Revenue Service (“IRS”).

FATCA is to achieve full transparency to curb tax evasions by US taxpayers holding financial accounts outside US.

The purpose of FATCA aims to achieve the objective by mandating Foreign Financial Institutions (FFI) such as CPF, to identify and disclose certain US customer information to IRS, otherwise FFI who choose not to enter into an agreement will be subject to a punitive tax of 30% on any US source Fixed, Determinable, Annual and Periodic (FDAP) income and gross proceeds generated by securities sales paid to such FFIs as defined by Chapter 4 of the US Hiring Incentives to RestoreEmployment (HIRE) Act.

“US Persons” means:

  • a citizen or resident of the United States,
  • a domestic partnership,
  • a domestic corporation,
  • any estate (other than a foreign estate, within the meaning of paragraph (31)), and
  • any trust if:
    (i) a court within the United States is able to exercise primary supervision over the administration of the trust, and 
    (ii) one or more United States persons have the authority to control all substantial decisions of the trust.

In order to comply with the FATCA requirements, CyproFund administration services Ltd (“CPF”) will put in place FATCA policies, processes and procedures where you will need to fill up our US Indicia Questionnaire and provide all required documentation or information, including but not limited to date of birth, countries of citizenship, countries of permanent residence, countries of tax residency and associated taxpayer identification numbers, that may be required to enable us and our agents to comply with all requirements of FATCA or other agreement by or between governments.

If there is any update to the information/FATCA status, you hereby agree to notify and furnish CPF with the relevant documentary evidence within 30 days of such change. You consent to and authorize CPF to perform any of the following, if
applicable:  

  1. Withhold any applicable payments in the account
  2. Report or disclose all relevant information relating to or arising from the account
  3. Terminate (with prior notice) your contractual relationship(s) with CPF

Kindly consult a professional tax adviser as CPF is in no position to offer “any tax advice”

IIf you are a US person/taxpayer under FATCA, then CPF will be required to (report, if applicable) certain information on your account to the local tax authority or the IRS. Failure to provide the relevant FATCA Documentation will deem you as a recalcitrant client. CPF will not be held accountable/liable for all necessary activities /steps taken to be in compliance with IGA.

Our rights under this Notice shall be without prejudice to other rights of collection, use and disclosure available pursuant to the terms and conditions or under the law and nothing herein is to be construed as limited any of these other rights.

Regards
For and on behalf of
CyproFund Administration Services Ltd