Glossary of FATCA terms
Retail Banking and Wealth Management – Sri Lanka
(Page last updated April 2020)
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Retail Banking and Wealth Management – Sri Lanka
FFI is the abbreviation for foreign financial institution. It refers to a non-US financial institution. The FATCA legislation contains an extensive definition of FFI and includes entities such as banks, custodian institutions, investment funds and certain types of insurance companies.
Withholding certificates, also referred to as W forms, are US Internal Revenue Service (IRS) tax forms.
The W-9 form is a ‘request for taxpayer identification number and certification’. This US tax form is provided by an account holder to confirm and certify their US status. The W-8 series forms are currently used by foreign persons (including corporations) to certify their non-US status. The forms establish that one is a non-resident alien or foreign corporation, to avoid or reduce tax withholding from US source income. These forms will permit a non-US customer to self-certify their status under FATCA.
An IGA is an agreement between the US and specific countries to build FATCA compliance into the country’s legal framework so that the country can implement FATCA. An IGA will require financial institutions to provide the information on US accounts which they hold either:
The IRS is the United States government agency responsible for tax collection and tax law enforcement.
An NFFE (non-financial foreign entity) is a non-US incorporated/established entity that does not meet the definition of an FFI (foreign financial institution) and includes:
A US IRS specific term: tax identification number.
For an individual this would be their US social security number, for an entity their employer identification number.
The term ‘specified US person’ means any US person other than:
The term ‘US person’ means:
The term ‘US citizen’ means:
A 30% withholding tax applies under FATCA on ‘withholdable payments’ in respect of financial institutions that do not comply with the FATCA requirements and/or customers who do not provide the requisite FATCA documentation.
The term ‘withholdable payment’ means:
Various exceptions apply, including for income connected with a US business.
(Page last updated April 2020)