In order to keep your business operations running smoothly and comply with global laws, Singapore companies are now required to comply with FATCA and CRS reporting. What are these laws, and why are Singapore businesses required to follow them? Find out in this article!
What is FATCA?
The Foreign Account Tax Compliance Act (FATCA) is a United States law that requires certain foreign financial institutions (FFIs) to report information about their U.S. account holders to the IRS.
Singapore’s companies are required to comply with FATCA and CRS regulations as part of our global effort to combat tax evasion and money laundering.
What are the benefits of complying with FATCA?
There are a number of benefits to compliance with FATCA, including:
Increasing transparency and accountability in the global financial system; deterring tax evasion and money laundering; enhancing compliance efforts by FFI’s worldwide; and providing better information for tax authorities around the world.
What is CRS?
From October 1, 2017, all foreign financial institutions (FFIs) with US$50 million or more in gross US assets were subject to the Foreign Account Tax Compliance Act (FATCA). The counterparty rules set out in the Canada-US Interchange of Information Agreement (CRS) apply to certain Canadian financial institutions that are “participating financial institutions” under FATCA. Participating Canadian financial institutions must provide their US clients with information about their accounts and certify their compliance with CRS requirements.
CRS is a bilateral agreement between Canada and the United States that sets standards for the exchange of tax information. In general, it requires participating financial institutions to collect information about their clients’ income, assets and transactions, and report this information to each other on a regular basis. By doing so, participating banks can identify potential tax evaders and avoid penalties from the IRS.
The benefits of complying with CRS include:
-Reduced compliance costs for banks;
-Preventing fraudulent activities; and
-Helping bank customers comply with their tax obligations.
Why are companies required to comply with FATCA and CRS regulations in Singapore?
The Foreign Account Tax Compliance Act (FATCA) and the Common Reporting Standards (CRS) are two pieces of legislation that companies in Singapore are required to comply with. FATCA is a United States law that requires foreign financial institutions (FFIs) to report any US citizen’s account information to the IRS. CRS is a global standard that requires companies to report financial data about their international citizens to tax authorities in countries where those individuals reside or have businesses.
FATCA was originally passed in 2010 as part of the American Recovery and Reinvestment Act. The goal of FATCA was to crack down on tax evasion by foreigners, and by extension, increase revenue for the United States government. Since its inception, FATCA has been met with many criticisms. One major concern is that it will cause banks and other financial institutions to stop doing business with certain entities, including some legitimate businesses. Another issue is that it is difficult for taxpayers to understand and comply with FATCA requirements.
Singapore responded quickly to FATCA’s passage by passing its own version of the law, known as the Foreign Account Tax Compliance Act (FATCA) Regulations. The regulations require all FFIs doing business in Singapore to comply with FATCA requirements, including reporting any US citizen’s account information. Additionally, all companies must report information about their international citizens who reside or have businesses in countries where those individuals reside or have businesses.
Singapore’s companies are required to comply with FATCA and CRS regulations due to the country’s status as a financial hub. These regulations require Singapore companies to report any U.S.-owned cash or investment accounts that exceed $50,000 in value. Additionally, Singapore companies are required to disclose any foreign account holders who have controlled or owned 5 percent or more of the company’s shares for at least two years. As a result, many Singapore businesses are now taking steps to comply with these complex regulations.