Dec 11, 2013 | Uncategorized

Tax Compliance Act–FATCA Deadline

The Foreign Account Tax Compliance Act will require certain financial institutions to identify and disclose direct and indirect U.S. investors and withhold U.S. income tax on nonresident aliens and foreign corporations.  If withholding is not made, these institutions will be subject to a 30% U.S. withholding tax on payments received from U.S. sources, (aka “The FATCA Tax”).

Foreign financial institutions have until April 25, 2014 to complete certain steps in order to avoid being subject to the FATCA Tax.  Offshore and domestic fund managers as well as should contact their tax advisers and compliance advisers to prepare for the requirements which may include updating offering documents and subscription materials.