The Foreign Account Tax Compliance Act (FATCA) is a US law that requires foreign financial institutions to report information about their US account holders to the US Internal Revenue Service (IRS).
Singapore is one of the many countries that have entered into a FATCA agreement with the US. Under this agreement, Singaporean financial institutions are required to collect certain information from their US account holders and report it to the Inland Revenue Authority of Singapore (IRAS), which will then transmit the information to the IRS.
US citizens, US green card holders, and US tax residents in Singapore who have financial accounts with Singaporean financial institutions are subject to FATCA reporting. This includes individual accounts, joint accounts, trust accounts, and certain types of insurance policies.
To comply with FATCA, Singaporean financial institutions must identify their US account holders and collect certain information such as their name, address, taxpayer identification number, and account balance. They must also report certain financial transactions, such as interest, dividends, and capital gains, to the IRAS.
US account holders in Singapore should ensure that they have provided their financial institutions with the necessary information and documentation to comply with FATCA. Failure to comply with FATCA reporting can result in penalties, fines, and even the closure of accounts.
Overall, the FATCA agreement between Singapore and the US is designed to improve tax compliance and prevent tax evasion. By collecting and sharing information about their US account holders, Singaporean financial institutions are helping to ensure that the US government receives the taxes it is owed from its citizens living abroad.