FATCA (Foreign Account Tax Compliance Act) is an American regulation that aims at fighting against tax evasion from American taxpayers and which terms have progressively entered into force from 1 July, 2014.
FATCA regulation is exterritorial: it applies outside the United States to a broad scope of financial institutions including banks but also investment funds, asset managers and life-insurance companies. The latter must identify U.S persons and declare them on an annual basis to the American tax authority, the IRS (Internal Revenue Service), to allow an automatized cross-check with their individual tax declarations.
The obligations contained in the regulation depend on the country in which the financial institution is located.
To reduce local declarative burdens, more than 100 countries have signed or are committed to sign a bilateral agreement ("Intergovernmental Agreement" - IGA) which can take two forms:
• In IGA Model 1: financial institutions located in countries such as France or the United Kingdom apply local rules and are in contact with their local authorities.
• In IGA Model 2: financial institution located in countries like Switzerland or Hong Kong apply hybrid rules and depend on their local authorities and the IRS.
Other financial institutions located in countries that did not sign an agreement like Russia, Monaco or most countries in Africa apply the whole of FATCA rules, called Final Regulations, and are in direct contact with the IRS.
The refusal, by non-US financial institutions or clients to respect these obligations is sanctioned by the application to them of a 30% withholding tax on certain US-source income.
Societe Generale group’s position regarding FATCA
Societe Generale group has complied with FATCA regulatory obligations in every country in which it is based.
The list of Societe Generale group’s financial institutions registered to American authorities regarding FATCA and that mentions their Global Intermediary Identification Number (GIIN) is updated monthly on this website. It is available to consultation by clicking on the related link at the bottom of this page.
Societe Generale has been registered to the IRS and takes part to the tax transparency framework that were set up by American authorities. FATCA identification numbers (GIIN) have been delivered by the IRS to all concerned entities within the Group. This attests to their level of compliance regarding third parties.
To further encourage tax transparency, Societe Generale group also commits to fulfill all its obligations under FATCA according to the principles defined by the Group’s Tax Code of Conduct.
Consequences of FATCA for Societe Generale clients
The Societe Generale group is getting closer to its clients, natural or legal persons, that can be concerned by FATCA regulation in order to enable them to be in compliance with the US law.
For individuals (individual or controlling person of a firm) as well as for legal entities, upon onboarding, Societe Generale gathers information from their clients attesting their situation regarding FATCA. If the client is an American taxpayer or is registered in the US, they must send a US tax form dully completed and in certain cases, the authorisation for lifting banking secrecy. Clients who do not present a US indicia must fill out, depending on the case, a self-certification justifying their tax residence, a US tax form or send any useful information testifying to their residence.
In the case of a change in circumstances and/or if a US indicia is detected, the client will have to send a new documentation to be in compliance with FATCA. In the absence of a reply, the client may expose himself to a 30% flat-rate withholding tax over some of his US-source income.
American taxpayers will be reported annually to the IRS. Reportings sent by Societe Generale include notably information about the identification of these clients, their account balances, financial income and gross proceeds.