According to the Foreign Account Tax Compliance Act (FATCA), it is required to ensure that the US taxpayers would comply with the requirements of the US tax law and prevent their abuse of foreign banking services in order to avoid the relevant financial obligations. With regards to this agreement, the banks operating in Latvia must identify the accounts belonging to the US taxpayers. The information about these accounts and their holders must be submitted to the State Tax Inspectorate, which shall pass the received data about the US taxpayers to the US tax authorities.
What data are collected and transmitted?
- Full name (company's name)
- US federal taxpayer identification number (abbreviated - TINs)
- Latvian taxpayer identification number
- Account number
- Account balance or value
- Total amount of interest, dividends and other revenue
- Total gross income from the sale or redemption of the assets
- Name and identification number of the reporting US financial institution
Common reporting standard (CRS)
The Organization for Economic Co-operation and Development (OECD) establishes standards relating to the payment of taxes (more information).
Danske Bank is guided by the order, which provides that the financial institutions are required to present to the State Tax Inspectorate under the State Revenue service of Latvia the data and information about the resident of the European Union member states or other jurisdictions and the information about their accounts.
According to the Common Reporting Standard (CRS), which entered into force on 1 January 2016, the financial institutions are required to identify financial accounts belonging to the clients who are residents for the tax purposes of the country or jurisdiction that is not the financial institution's state or jurisdiction.
According to this law the bank is required:
- Identify the residency of new private and corporate clients for the tax purposes (including the clients who have a residence for tax purposes only within the country)
- Check the existing private and corporate clients whose residence for tax purposes is in a country which is different from the country of the bank's activities (deadline - 31 December 2018)
- Identify the clients legal persons and their beneficiaries/controlling persons whose residence for tax purposes is in a country which is different from the country of the bank activities
- Notify the local tax authorities about the clients whose residence(s) for tax purposes is/are in a country which is different from the country of the bank activities
Therefore, we ask the clients to specify the countries in which you pay the taxes, as well as your taxpayer identification number.
The forms approved by FATCA/CRS:
FATCA/CRS Self-Certification Form for Entities
FATCA/CRS Self-Certification Form for Individuals
What data is collected and transmitted?
- Full name (company's name)
- Jurisdiction(s) of residence, where the person has a duty to pay taxes
- Taxpayer identification number(s) (acronym - TINs); See here for more information on TIN formats applicable in the relevant jurisdictions
- Date of birth
- Place of birth
For more information about the regulations for residence for tax purposes in a particular jurisdiction can be found on the OECD website.