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The Foreign Account Tax Compliance Act (FATCA) is specific United States (US) legislation that aims to reduce tax evasion by US citizens, tax residents and entities. US citizens and tax residents are required to report their worldwide income to the Internal Revenue Service (IRS) whether they live in the US or not.
FATCA is a reporting regime that ensures US persons (and New Zealanders with accounts in the US) meet their tax obligations. It requires all foreign financial institutions that are not exempt, including New Zealand financial institutions (NZFIs), to register with the IRS. They must report on US citizens and tax residents who have specified foreign financial assets that exceed certain thresholds.
New Zealand has entered into a FATCA Intergovernmental Agreement with the United States under which New Zealand financial institutions are required to provide specified identity and financial information about such accounts to Inland Revenue, which will then be provided to the United States under the double tax agreement (DTA) that New Zealand has with the United States.
What is the Common Reporting Standard (CRS)?
The CRS is a global framework for the collection, reporting, and exchange of financial account information about people and entities investing outside of their tax residence jurisdiction.
New Zealand is one of many jurisdictions that has committed to a global initiative led by the Organisation for Economic Co-operation and Development (OECD) on the automatic exchange of financial account information using the CRS.
This information is required by law to be collected by financial institutions around the world for reporting to tax authorities. Tax authorities will exchange this information to ensure everyone pays the right amount of tax. Tax pays for services we all need and to improve the communities in which we live.
What information do I need to provide?
Centuria asks all investors to complete a self-certification declaration confirming your overseas tax residency status. You will find this in our paper and online application form, we may also request this via email or our investor portal.
If you are an overseas tax resident, we will ask you to provide your name, date of birth, address, country of tax residence and your foreign tax number.
Who is responsible for FATCA and CRS in New Zealand?
The Inland Revenue Department (IRD).
When is the reporting deadline to the IRD for FATCA and CRS?
Centuria is required to report to the IRD annually by 31 July.
What can an investor do if they are unsure of their overseas tax residency?
Investors can refer to the IRD website for guidance on FATCA and CRS or contact a tax advisor for further information.
Which type of investors are required to complete FATCA/CRS?
What FATCA/CRS information is required to be completed for Individual and Joint Individual accounts?
We ask all individuals to declare if they are a tax resident of another country other than New Zealand. If they are a tax resident outside of New Zealand we request their name, date of birth, address, country of tax residence and your foreign tax number.
What FATCA/CRS information is required to be collected for partnership, company and trust accounts?
We ask you to declare whether the entity is a tax resident outside of New Zealand. We also ask you to declare if the controlling parties (e.g. trustee, shareholder, partner etc) of the entity are tax residents outside of New Zealand.