API Marketplace

Solutions

Resources

Our Company

Book a Demo

← Back to Glossary

FATCA Tax Reporting Compliance

United States

2010

Tax & Reporting

Overview

The Foreign Account Tax Compliance Act (FATCA) was enacted in the United States in 2010 as part of the HIRE Act to combat offshore tax evasion. FATCA requires foreign financial institutions (FFIs) and certain non-financial entities to report information about financial accounts held by U.S. taxpayers to the Internal Revenue Service (IRS) or their local tax authorities under intergovernmental agreements (IGAs).

The regulation applies to banks, investment firms, insurance companies, global custodians, fintech platforms, and other financial institutions that hold or process assets on behalf of U.S. account holders, regardless of jurisdiction.

Key Obligations

Identify and report accounts held by U.S. persons or entities with substantial U.S. ownership
Conduct due diligence on new and existing accounts using specified identification procedures
File annual FATCA reports to the IRS or local tax authorities (via Form 8966 or IGA mechanisms)

Withhold 30% on certain U.S.-source payments to non-compliant FFIs or account holders
Register with the IRS FATCA portal and obtain a Global Intermediary Identification Number (GIIN)
Ensure internal controls, recordkeeping, and training related to FATCA compliance

Stay ahead of risk with Signzy

Explore tools that help you onboard, monitor, and verify with confidence

One Touch KYC

Launch global KYC flows with built-in document OCR, liveness checks, deepfake detection, and AML, all through a single, customizable dashboard.

AML Screening

Screen users against Politically Exposed Persons (PEP), watchlists, sanctions lists, adverse media, and more through one-time screening and advanced monitoring.

Business Verification

Verify businesses with reliable documents OCR, EIN checks, UBO data, sanctions screening, global registry checks, and more.

Related Regulations

OECD CRS Tax Reporting Standard

Corporate Transparency Act BOI Rule

Bank Secrecy Act AML Law

FAQ

Who must comply with FATCA?

Foreign financial institutions and certain U.S. entities holding financial assets for U.S. taxpayers.

What are the penalties for non-compliance?

A 30% withholding tax applies to U.S.-source payments made to non-participating FFIs or recalcitrant account holders.

Is FATCA the same as CRS?

No, FATCA is a U.S. law focused on U.S. taxpayers; CRS is a global OECD initiative for mutual data exchange.

What is a GIIN?

A Global Intermediary Identification Number issued by the IRS to registered FFIs for FATCA compliance tracking.