Facts About Fatca

What is FATCA?

The Foreign Account Tax Compliance Act (FATCA) is a statute of the United States of America (US), geared at combating tax evasion by US persons who utilize such means
as holding investments in offshore accounts and or entities.


FATCA requires all non-US financial institutions [foreign financial institutions(FFIs)] around the world to

  • each enter into an agreement with the US Internal Revenue Service (IRS),
  •  collect certain information on all new and existing accounts they hold for US persons,
  •  report  information in relation to certain US persons to the IRS, and
  •  withhold and pay over to the IRS 30% on certain payments of US source income,
  • as well as gross proceeds from the sale of stocks or securities that generate US source income, made to:
    •  Non-participating FFIs ( which are foreign financial institutions that have not entered into an FFI agreement with the US Internal Revenue Service. By declining to participate, such institutions are (among other things) refusing to: report information on certain US persons, implement procedures to identify US persons, and withhold on U.S. source income to recalcitrant accounts holders and non-participating FFIs.)
    • Individual account holders failing to provide sufficient information to determine whether or not they are a US person (recalcitrant account holders), or
    • Foreign entity account holders failing to provide sufficient information about the identity of their substantial US owners (also classified as recalcitrant).

      Who will be affected?

      In addition to foreign financial institutions, specified US persons will be affected. This includes:

      -U.S. Citizens residing in the US or overseas
      -Green card holders
      -U.S. Passport holders
      -U.S. Tax residents, which are persons who have stayed in the US for several consecutive days during the past three years. To meet this test, one must
      be physically present in the United States on at least:
        1. 31 days during the current year, and
        2. 183 days during the 3-year period that includes the current year and the 2 years immediately before that, counting:
      - All the days you were present in the current year, and
      - 1/3 of the days you were present in the first year before the current year, and
      - 1/6 of the days you were present in the second year before the current year.

      What is an intergovernmental agreement?

      In order to lessen the some of the requirements of FATCA, the Government of Jamaica entered into an Inter-Governmental Agreement (IGA) with the US Government.
      Similar agreements have been or are being negotiated with several other countries globally. The Cayman Islands has also signed an IGA, while we understand the Government of Trinidad & Tobago is negotiating one. Under the Jamaican IGA, local FFIs will report information on US persons to a local authority (the Tax Administration of Jamaica), which in turn will provide this information to the US under an automatic exchange of information. The Caymanian IGA will result in the financial institutions from that territory providing the Tax Information Authority/its designate with information
      pertaining to US persons for onward submission to the US.

      Some other advantages of having an IGA in place include:

      -Reduction in some of the costs, complexities and legal issues associated with achieving FATCA compliance,
      -Removal of the 30% withholding,
      -Removal of the 30% withholding on U.S. income of Jamaican and Caymanian FFIs,
      -Greater alignment with existing Know Your Customer requirements,

      Who are recalcitrant account holders?

      This refers to account holders who fail to comply with any request by an FFI to provide documentation and/or information required to determine the status of their accounts (i.e. US or non-US accounts). As a consequence of this classification, FFIs are required to report the customers as recalcitrant. Customers who allow their accounts to become recalcitrant may also see their financial institutions giving serious consideration as to the future of the business relationship.

      What will be the impact of FATCA on our customers?

      Effective July 1, 2014, to align with the requirements of FATCA, National Commercial Bank Jamaica Limited (NCB) and some of its subsidiaries will be making changes to our account opening procedures, in particular the information that we collect to satisfy our Know Your Customer (KYC) procedures.

      Additional Information:

      Should you require further clarification, you can either visit:

      -The Internal Revenue Services website at www.irs.gov.

      Or call:

      -Our Customer Care Centre at 1-888-NCB-FIRST (622-3477)
      -Our Relationship Managers at any of our branch locations

      We continue to enjoy an exceptional banking relationship with you and thank you for selecting NCB as your Bank of Choice, and hope that together, we can help you to Put Your Best Life Forward.