Marcelo Castro Alves, the founder of Focus Investment Advisor, has just posted a new article (Portuguese version) to his website that takes a close look at what he refers to as ” FATCA and International Taxation ”

This article aims to provide some transparency to FATCA communication to clarify how the bank forms relate to processes in front-end and implementation of the IRS on the back end.


The FATCA is a federal law of the United States which can be summarized in two general requirements. First, the law requires US persons [citizens with US passports, holders of green cards-or permanent residents (permanent resident alien), or who passes the test of ‘substantial presence’ (usually 183 days or more in the US in any year or the average of 122 days or more over a period of three years the person is treated as a tax resident US)], including those living outside the US, to report their financial accounts located out of the country. Second, the law requires that foreign financial institutions (FFI) to report the IRS on its North American customers. FATCA can be found in the Internal Revenue Code (IRC) together with the regulations of corresponding treasury.

Citizens with dual citizenship and expatriates need to know the basics about FATCA. In an effort to provide transparency and visibility, I will try to show these complex compliance regulations a simplest way possible. Please note that I am not giving legal advice and if you find yourself subject to any of these requirements, I recommend recruit the services of an authorized federal tax advisor (FATP) that has a solid experience with these important questions.


There are currently three basic (new) forms that are used:

  1. W9
  2. W8-BEN
  3. W8-BEN-E

W9 – applies to whom?

The W9 form must be completed and submitted by an individual US taxpayer, be it an individual, a US firm, a partnership or another entity.

W9 – what information is shared?

The information that is shared is your name, address, taxpayer identification number (social security, TIN or EIN), status (individual, company, etc.), exemption if applicable, name and address from the bank.

W9 – What happens after you submit this document to the bank? The FFI will conduct the matching of TIN numbers and will issue the appropriate form at the end of the year to you as the taxpayer and the IRS. TIN matching allows the bank, which is required to file 1099 type of form.

W8-BEN – applies to whom?

The W8-BEN form applies to individuals who are not residents of the United States.

You need to fill this form if:

  1. You are receiving payments subject to withholding on US source
  2. It is the holder of a bank account in a FFI
  3. A sole proprietor of an entity

In essentially, anyone with a bank account at a designated FFI may have to fill this form, regardless of their nationality or ties with the United States.

W8-BEN – what information is shared? The information reported is similar to W9. If you do not have a TIN, you will need to provide your date birth on line 8 of the form.  W8-BEN – What happens after you submit this document? The W8 resulted in a final form that is created and passed on by the banks to the IRS: Form 1042-S.

W8-BEN-E – applies to whom?

Just as the W8-BEN, there are many foreign entities that will need to complete the W8-BEN-E. The foreign entity must fill out the form W8-BEN-E if:

  1. He receives a payment subject to withholding tax by FATCA
  2. It receives a payment that is subject to IRS retention rules
  3. It holds an account with an FFI

W8-BEN-E – which information is shared?

The information requested here are substantial. The new form itself is eight pages and has more 30 pieces, some of which are relevant and some not. This is not a form of “do-it-yourself” and It should always be completed by you or a tax professional. W8-BEN-E – What happens after you submit this document? Very similar to W8-BEN form.

FATCA – declaration forms:  US taxpayers have a requirement of FATCA statement, via the IRS Form 8938 and the FinCEN Form 114 (FBAR).

In summary, the compliance with the FATCA rules through its forms is substantially complex. Taxpayers who face these issues should consult with an accountant professional or an experienced tax lawyer to ensure that all items are filled in correctly for your specific case.

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