Compliance regulations for US tax residences

Please fill out the “Customer information form” confirming Your tax residency status. After completing the information form, please sign it digitally and send it to info@swedbank.ee.

Foreign Account Tax Compliance Act (FATCA)

FATCA is a U.S. source regulation that was enacted in 2010 to target non-compliance by U.S. taxpayers using foreign accounts. FATCA requires foreign financial institutions to report to the U.S. information about financial accounts held by U.S. taxpayers, or by foreign entities in which U.S. taxpayers hold a substantial ownership interest. FATCA has a cross-border effect and as such financial institutions throughout the world will meet its requirements.

Dodd-Frank

The Dodd–Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank) is a US federal law that was passed as a response to financial crisis. It brought significant changes to financial regulation in the U.S. Among its numerous aims were comprehensive regulation of financial markets and strengthened investor protection. The regulation strives to protect U.S. persons. As such it has cross border effect. Financial institutions throughout the world have to adjust to those rules. This may mean limiting access to certain investment services and products to U.S. persons.

The regulation strives to protect U.S. persons. As such it has cross border effect. Financial institutions throughout the world have to adjust to those rules. This may mean limiting access to certain investment services and products to U.S. persons.

FATCA requires US taxpayers to report their foreign financial assets

As of 1 July 2014, financial institutions worldwide must ask their clients whether they are US taxpayers. They must also find out whether the owners of their corporate clients are US tax residents or citizens. All of this is required by the new US law Foreign Account Tax Compliance Act or FATCA. The United States has entered into data collection agreements with many countries, including Estonia.

  • Who is obliged to pay tax in the US?

    US taxpayers include the following:

    • citizens and tax residents of the United States;
    • persons who have the right to settle in the United States at any time (holders of US residence permits or Green Cards);
    • persons who have stayed in the US for a certain period of time (with some exceptions) – click here for more information.
  • What do clients who are US tax payers have to do?

    If a client is a US taxpayer, we ask him/her to fill in a form and add the US Federal Taxpayer Identification Number (TIN). The client obtains this number from the US tax authority.

  • What must be considered by corporate bodies that have at least one beneficial owner (a person who owns at least 25% of the legal entity or who controls at least 25% of such a legal entity in any other manner) who is a US taxpayer or citizen?

    A legal entity must be prepared to disclose the tax residency and citizenship of its beneficial owner. If a large part of the income of a legal entity whose beneficial owners is a US tax resident or citizen comprises passive economic activities, the financial institution must disclose the data of the legal entity to the Tax and Customs Board.

    Additional information about passive income
  • What happens if a client fails to submit the required data?

    If a client fails to submit the required data, the financial institution must disclose the legal entity’s data to the Tax and Customs Board.

    The information on this page is a summary. Detailed information is available on the website of the US Inland Revenue Service.

    You can also find more information about FATCA on the website of the Ministry of Finance.