Many multinational corporations (MNCs) whose primary business activities are outside of the traditional financial services industry mistakenly believe the USA's FATCA (Foreign Account Tax Compliance Act) will not impact them. Well, PwC, and Deloitte many other consultancies believe that FATCA may well impact all MNCs. PwC reckon that it will affect non-financial MNCs in at least one of the following three ways:
- additional documentation may need to be collected from certain non-US parties related to payments made as part of the Treasury and Accounts Payable function
- entities within the MNC's worldwide group may, in fact, meet the definition of a "foreign financial institution" or "non-financial foreign entity" and may be required to take affirmative steps to be compliant under FATCA
- MNCs will need to verify whether their foreign banking or other financial relationships that they have within their global organization are with foreign financial institutions that are FATCA compliant.
Many guides are available on what to do about FATCA, including:
- PwC: Taking Control of FATCA
- Deloitte: offer three guides - see web-site.
The one thing for sure is that FATCA will make corporate treasury departments life more complicated and will make opening bank accounts even more complicated, e.g. some analysts estimate that the new FATCA checks could add 60 days+ to the on-boarding process for a new customer or client. Banks are having to invest heavily to comply with the new FATCA regulations and it is likely that there will be great variations in the on-boarding services they offer.
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