FATCA and CRS/DAC2 reports

The Foreign Account Tax Compliance Act (FATCA) is a United States federal law requiring United States persons (including those living outside the U.S.) to have yearly reported themselves and their non-U.S. financial accounts to the Financial Crimes Enforcement Network (FINCEN), and requires all non-U.S. (foreign) financial institutions (FFI's) to search their records for suspected U.S. persons for reporting their assets and identities to the US Treasury.

FA Platform can facilitate collection of this information by generating the XML report based on the data in FA. The generated XML file can then be sent to the authorities. In nutshell, FA can gather selected contacts' (i.e. U.S. persons) holdings and output them in the XML file.

OECD has developed a standard for international automatic exchange of financial account information in tax matters, Common Reporting Standard (CRS). In European Union CRS information exchange is implemented based on DAC2 directive.

In nutshell, while the FATCA report reports the holdings of U.S. persons, the CRS/DAC2 report is used to report the holdings of EU persons (outside of the financial institution’s home country). Other than that, the structure of the report is largely the same as FATCA report’s.

FA’s Standard Solution supports the common CRS/DAC2 schema and Finnish schema for CRS/DAC2 (taxfi). Common version is referred as CRS/DAC2 and Finnish version as CRS/DAC2 (Finland).

On both FATCA and CRS/DAC2, controlling persons refer to natural persons who exercise control over entities (for example, companies). To report these relationships correctly in the FATCA and CRS/DAC2 reports produced in FA, the linkages have to be in place as described in Configure FATCA and CRS/DAC2 reports.

FATCA and CRS/DAC2 reports are created in FA based on the list of applicable portfolios that need to be reported. Reporting can be done with three different scopes, Accounts, Funds and Funds with sponsor reporting.