Foreign Account Tax Compliance Act was enacted in 2010 subsequent to the 2007 economic recession .It compels Financial Institutions to disclose annually to the Internal Revenue Service(IRS) financial information in respect of USA Citizens’ offshore income.
It is aimed at detecting, deterring and discouraging offshore tax evasion. It creates greater transparency by strengthening exchange of financial information for tax purposes.
Financial Institutions (including financial service providers) such as insurance companies that issue or are obligated to make payments in respect of cash value insurance contracts or annuity contracts or entities that provide investment instruments such as private equity funds, mutual funds, hedge funds etc.
Swaziland intends entering into an IGA with the USA and therefore Financial Institutions should be aware of the following fundamental points in respect of FATCA: