Financial Institutions are required to identify foreign tax residents and report their details and relevant financial account information to their local tax authority (in Australia, this is the Australian Taxation Office)(ATO). This is because Australia has entered into an international agreement (and passed laws) that will allow for the automatic exchange of account information. The below are two AEOI laws that may affect you.
FACTA is legislation introduced by the United States Government to improve compliance with US tax laws. This introduces a reporting regime for tax purposes for financial institutions with respect to certain accounts. P&N Bank is required to identify any accounts opened by customers who meet certain eligibility criteria. Information about these identified accounts will be reported to the ATO which will submit the information to the US Internal Revenue Service (IRS) on an annual basis.
This will only affect members who are identified as US residents or those whose residency cannot be identified due to insufficient information being provided.
CRS comes into effect from 1 July 2017 and is a global standard for the collection and exchange of account information. You will be required to certify your residence for tax purposes and provide your tax identification number if you are a foreign tax resident.
Where you are a foreign tax resident, or we have information that indicates you may be but you have failed to respond to any request for confirmation, P&N is obliged to report certain information annually to the ATO which will then exchange this with the tax authority of the appropriate country.
We may also contact you from time to time to confirm your tax residency and request additional information/documentation for support. It is advisable to let us know if, or when, your situation changes.
If you would like more information, please refer to the ATO website.
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