What is FATCA

FATCA is an acronym for the United States (US) Foreign Account Tax

Compliance Act (FATCA), which was introduced by the US Government in October 2009, but became law as part of the Hiring Incentives to Restore Employment (HIRE) Act on March 18, 2010. FATCA is aimed at ensuring that US persons with financial assets outside of the US pay US tax. The new rules require foreign financial institutions (FFI’s) to provide the (IRS) with information on certain investments of U.S. persons invested in accounts outside of the U.S. and for certain non-U.S. entities to provide information about any U.S. owners. In order to implement FATCA norms in India, the Government of India has reached an “in substance" Agreement to sign an Inter Governmental Agreement (IGA) with the U.S.A.


What is CRS

Alike FATCA , GOI has further committed to implement a Common

Reporting Standard (CRS) as part of reciprocal exchange of information on financial accounts on an automatic basis with other countries/ non-sovereign territories. India would be obligated to get its financial institutions to share financial account information of accountholders who are tax residents in any of these countries. Likewise, India would also get similar information through financial institutions of such treaty countries.


What is an Intergovernmental Agreement or


An Intergovernmental Agreement (IGA) is a bilateral agreement

between a country’s government and the U.S. government that facilitates compliance with FATCA. The model agreements enable FFIs in the designated jurisdictions to comply with FATCA, especially where privacy laws exist.


What is the purpose of FATCA/CRS

The purpose of FATCA is to prevent US persons from using banks

and other financial institutions outside the USA to park their wealth outside US to avoid US taxation on income generated from such wealth. FATCA obliges such banks and financial institutions to

report information about US persons having accounts with them. Similar to FATCA, the purpose of CRS is to aid automatic exchange of information between bilateral treaty partner countries about accountholders/investors maintaining accounts in foreign jurisdictions.


Who will be covered in the purview of FATCA


FATCA legislation will affect both individual and entities customers

who are treated as a ‘US person’ for US tax purposes. The FATCA legislation will also affect certain types of entities with beneficial owners/ controlling persons from US.

An account having U.S. indicia like U.S place of birth, U.S. address etc. does not necessarily mean that the account would be reported. However such accounts would be subjected to closer scrutiny by NAVIA MARKETS LTD. With respect to CRS, the coverage would extend to investors/ beneficial owners or controlling persons of entities, being tax residents of any of the 130 signatory countries.




Is FATCA/CRS applicable to both personal

accounts and business accounts?

FATCA legislation will affect both personal and business customers

who are treated as ‘US Person’ for US tax purposes. The FATCA legislation will also affect certain types of businesses with US owners.


What will be required of NAVIA MARKETS


The NAVIA is required to :-

1) Undertake certain identification and due diligence procedures involving new customers

2) Fulfill reporting requirements as may be defined by RBI/tax authorities in this regard. Therefore we would be reviewing our existing customer base to confirm our customers’ FATCA status, and where necessary we may contact our customers for further information and documentation.


What is the information that is being sought

from customers?

The information reported will depend on the classification of the

customer under FATCA and CRS. Customers will be expected to provide details such as Country of Tax residence, Tax Identification Number from such country, Country of Birth, Country of Citizenship, etc.

In case of Non-individual customers, the above mentioned information of any of the controlling persons will have to be submitted.

Apart from the above, NAVIA MARKETS LTD would be required to report additional information sought by the local authorities from time to time.


Will FATCA be applicable to me if am not a US


In general FATCA does not apply to non- US persons. However, if

any one of the indicators mentioned below is found, you may be required to provide additional information/documentation to determine if you are a US Person under FATCA.

• US citizenship or US residence

• US place of birth

• US address including US PO boxes

• US telephone number

• Repeating payment instructions to pay amounts to a US address or an account maintained in the US

• Current Power of Attorney or signatory authority granted to a person with a US address

• If ‘Care of’ or ‘Hold mail’ address which is the sole address for the account holder


How frequently will Financial Institutions seek information for

FATCA/CRS purposes

Financial Institution will seek such information from every new customer. Since FATCA/CRS is an ongoing process, if there is a change in the account information, we may be required to contact you to obtain additional information/documentation.




Will accounts held jointly by reportable

person and a non reportable person considered as reportable

A joint account which has one tax resident of a relevant foreign

country reportable owner is treated as a reportable account and therefore the entire account is subject to the FATCA/CRS legislation.


What if any customer refuses to provide the

requisite information

In case if a new customer refuses to provide the FATCA/CRS

information and documents then he/she may not be allowed to open an account with NAVIA MARKETS LTD.

While in case of pre-existing customers, such clients/customers will be treated as Recalcitrant Account Holders and be reported to the tax authority as such. A recalcitrant account holder is defined as per the FATCA/CRS regulations as any holder of an account maintained by an FFI if such account holder is not an FFI and not meeting the threshold exceptions and the account holder:

1 Fails to comply with the requests (documentation or information)

by FFI;

2 Fails to provide valid W9

3 Fails to provide waiver

4 Provides documentation to classify the entity as Passive NFFE but fails to provide information on substantial owners


What customer information is NAVIA MARKETS LTD expected to report to the U.S. IRS through the local regulator?

The Inter Governmental Agreement is yet to be finalized. While the

reporting /requirements will be finalized in the IGA, it is likely to include but may not be limited to the following information:

1) Name, address and Tax Identification Number (TIN) of each account holder that is a specified U.S. person

2) If the account holder is a Passive Non Financial Foreign Entity (NFFE), the name, address and TIN of each substantial beneficial owner of that entity that is a U.S. person

3) Account number

4) Account balance or value


What will happen if I do not provide the

requested information?

In light of the aforementioned, we urge you to cooperate. For more

information on FATCA please visit IRS website -


Where can I find detailed information on


FATCA and CRS regulations, notices and other related topics are available on the below websites:


IRS website - reign-Account-Tax-Compliance-Act-FATCA


OECD website - of-tax-information/