FATCA Implementation inside QNB ALAHLI 1) FATCA Overview FATCA (Foreign Account Tax Compliance Act), which is a US law whose objective is to fight against tax evasion schemes that use foreign accounts or entities held by US taxpayers, will become effective July 1, 2014. FATCA requires Participating Foreign Financial Institutions (PFFIs) to identify and disclose accounts held by US Persons and US owners of foreign entities. QNB group announced their participation with IRS, in the same time QNB ALAHLI became a Participating Financial Institution with IRS and should comply with these regulations. 2) Impact on the bank and its customers We expect FATCA regulations have no significant impact on the majority of our clients. currently QNB ALAHLI in process of reviewing the effect of the FATCA legislation for our existing customers, We may contact you after 1/7/2014 to request further information or documentation in order to verify your tax status in USA under FATCA. Also from 1/7/2014 FATCA requirements will be applied on the opening accounts process for the new customers including the legal supported documents required based on FATCA client status. The customers and financial institutions whom will not cooperate and provide the required data and supported documents to comply with FATCA legit elation will be identified as recalcitrant clients and could be subject to the application of a punitive withholding tax of 30% on certain payments. 3) Frequently Asked Questions for major inquires 1. 2. Who will be affected by the FATCA law? Both individuals and entities (Non-financial institution e.g. corporate…etc. and financial institutions e.g. banks…etc.) customers who are treated as a ‘US person’ will be effected by the law. Who is the US person from FATCA point of view? US person is any person who has one or more of the following: a) b) c) d) e) 3. 4. American Nationality. Dual Nationality one of them is an American. USA is the place of birth. Permanent resident (green card). Substantial presence in USA (183 days in current and previous 2 years) except for: i. Foreign students in USA. ii. Teachers and trainers in USA. iii. Foreign persons as diplomatic persons or assigned persons to a mission in the embassies, councils or international organizations in the US. Is QNB ALAHLI the only bank will be affected by FATCA? No, all banks in Egypt are intermediary by CBE to comply with FATCA and worldwide most large financial institutions intend to comply. Also other countries already entered into intergovernmental agreements with IRS. Does my account be affected only if I have a US nationality? Yes, however if the individual holds one or more of the following criteria a) US citizen or US resident b) US place of birth c) US resident address or US mailing address (including a US post office box) d) US telephone number and US Mobile number e) Standing instructions to transfer funds to an account maintained f) g) in the United States Power of attorney or signatory authority granted to a person with a US address An 'in-care-of' address’ or 'hold mail' address that is the sole address the FFI has identified for the account holder 5. 6. 7. 8. 9. When will the client start to be affected by FATCA requirements? The FATCA will be implemented on all on boarding customers starting from 01/07/2014 to identify the US persons. If I am a US person holding an account with QNB ALAHLI what shall I do? You may be asked to provide QNB ALAHLI with additional information/ documentation, if you are considered a US person. In addition of that, QNB ALAHLI will be obligated to report information about you and your account to the Internal Revenue Services IRS (American tax authority). If I am not a US person holding an account with QNB ALAHLI what shall I do? For most customers, FATCA will have minimal impact, and there will be no action required. However, QNB ALAHLI may still contact you to confirm your status as a nonUS person. What are the expected documents that the bank might need to identify my FATCA status? QNB ALAHLI will communicate the customers to tell them in details what the needed documents are; Documents may include US tax forms or selfdeclarations of FATCA status. What is the information that will be reported to the IRS (American tax authority) through QNB ALAHLI? It depends on the FATCA classification of the customer. This information will personal (e.g. name, address, US taxpayer identification number), and of a financial nature (e.g. account number, account balance/value). We will be communicating with the affected customers in detail on these requirements. N.B: For more details about FATCA, you can find it in the following link <www.irs.gov/FATCA>.