FATCA – Will your bank account be blocked?

By Justyna Skorupska2016-11-18 No Comments

FATCA ( Foreign Account Tax Compliance Act) is an act passed in 2010 by The Congress of The United States. It aims for repairing the US tax system by being after those tax payers, who hide their incomes on bank accounts in financial institutions from abroad. To make it happen, The US has to conclude agreements with other countries, incl. Poland.

According to the Act, all financial institutions in Poland are obliged to gather FATCA Statements form the owners of bank accounts and investment products regarding the information, whether they are US taxpayers.

Who has to provide the Compliance Statement?

  • The Statement has to be filled by private and business clients, who opened an account in financial institution between 1. July 2014 and 30. November 2015 and have a deposit exceeding 50.000 USD;
  • Very important is the fact, that it includes not only bank accounts. The Statement should be filled also, when a new agreement with insurance company, brokerage house or investment fund was signed.
What if my deposit doesn’t exceed 50.000 USD?

Theoretically, the statement does not have to be submitted, when the amount of money on your account is smaller than 50.000 USD. In fact, a lot depends on the bank- some of them impose their client to fill such statement.

An example of Deutsche Bank shows, that individual clients, whose account’s balance as of 30th November 2015 exceeded 50.000 USD were supposed to provide the Statement. Business clients were also supposed to provide the Statement, no matter of the account’s balance or the deposited amount. By contrast, mBank doesn’t care about the deposit – the most important is when the account was opened.

What about accounts opened before 1st July 2014 and after 30th November 2015 ?

You probably signed the FATCA Statement in a particular financial institution, if you signed an agreement with bank, insurance company, investment fund or brokerage house after 1st December 2015. To be calm just make certain, that you don’t have to provide any complementary documents.

If your account deposit exceeded 50.000 USD as of 30 June 2014, the financial institution should ask you for appropriate documents.

Attention: The deadline for The FATCA Statement is on 1st December 2016. If you don’t prove the Statement on time, a few days later an access to your account can be blocked.

What would be the effect of not providing the Statement on time?

If you don’t submit the FATCA Statement on time, and your financial institution recognize it as demanded, you will lose an access to your account after 1st of December 2016.

According to the Article 19.7 of The Act from 9th October 2014 about The Agreement between The Government of Poland and The Government of The United States regarding the improvement of fulfilling the international tax duties and the implementation of FATCA legislation „The blockade of a bank account lies in temporary preclusion of disposing and using all assets of yous bank account, including its usage by financial institution. The blockade can involve the part of assets on the account”.

Another consequence would be a transfer of your personal information to the US Tax bodies, to be assured, that you don’t hide any money and there is no tax evasion.

What should be done to unblock the account?

If a bank account is blocked, you should contact your bank as soon as possible and sign the FATCA Statement so that the bank can unblock your account.