28 March 2019
Do you hold an account abroad? Are you subject to taxation outside of Belgium or the European Union? Perhaps you have investments in the USA? Find out more about the regulations concerning CRS and FATCA.
What is CRS?
CRS stands for “Common Reporting Standard”, a set of regulations and guidelines which govern how tax-related information is exchanged between certain countries. There are over 3600 bilateral exchange relationships activated with over 100 countries or jurisdictions having committed to the CRS. The CRS contains the reporting and due diligence standards that govern the automatic exchange of financial account information.
The European Union has decided to adopt the CRS by amending its directive on administrative cooperation in the field of taxation. This new directive will be applied as of 1 January 2016 between member states of the European Union.
Who does CRS apply to?
The measures apply to any private individual or legal entity residing in a participating CRS jurisdiction, including Belgium. However, it is mainly relevant for accounts held directly or indirectly by foreign tax residents.
What is ING required to do under CRS?
Under CRS rules, ING Belgium is legally obliged to:Under CRS rules, ING Belgium is legally obliged to:
Identify new and existing account holders who show indications of being a resident of another country for tax purposes. This potentially requires additional documentation.
- For individual customers, these criteria typically include:
- Having a residence in another country.
- Having a physical or mailing address in another country, including a post office box or care of (c/o) address.
- Having a c/o or hold mail address in another country as their only address.
- Having one or more telephone numbers in another country without having a telephone number in Belgium.
- Granting a power of attorney or signatory authority to a person with either a physical or mailing address in another country, including a post office box or c/o address.
- Issuing standing orders in euro (SEPA) from an ING Belgium account (other than a current or savings account) to an account maintained in another country.
- For legal entities, the criteria include:
- Being incorporated or organised in another country.
- Having a current physical or mailing address in another country, including a post office box or c/o address
- All countries do not yet take part of CRS. However, an increasing number of them will eventually participate to CRS. To anticipate these changes, ING Belgium also documents customers with indicia which do not yet participate to CRS today.
Report information to local tax authorities. It concerns information regarding accounts held directly or indirectly (as beneficial owner) by customers which are taxpayer in a participating CRS jurisdiction:
- The identity of each foreign reportable account holder on reportable accounts (including tax residencies and related Tax identification Number (TIN)).
- The reportable account number
- The balance of these accounts on 31st December each year
- Any income (interest, dividends, gross proceeds, etc.) deposited onto these accounts
The first reports communicated in 2017 will cover the year 2016. The Belgian tax authorities will forward this information to the tax authorities of the relevant participating CRS jurisdiction.
Is CRS applicable in Belgium?
Belgium, like most European nations, has signed the multilateral agreement, which provides for the automatic exchange of tax-related information with other signatories to the agreement. While the agreement is multilateral, the actual exchanges are bilateral.
This agreement is implemented by the law of 16 December 2015 regulating the exchange of financial account information between Belgian financial institutions and the FPS Finances in the frame of an automatic exchange of information on tax matters at international level.
This means that all financial institutions in Belgium, including ING Belgium, are required to report the above-mentioned information to the Belgian tax authorities. They then pass this information on to the tax authorities of the relevant participating CRS jurisdiction.
What does CRS mean for me?
The goal of CRS is to determine whether a certain customer’s account information needs to be reported or not. For individual customers, this means determining where the customer is a resident for tax purposes. For legal entities, it involves determining the type of entity (primarily its business activity), its country of residence for tax purposes and in some cases, the beneficiary owner’s country of residence for tax purposes.
If any of the above-mentioned indications apply to a customer of ING Belgium, we will first contact you for further clarification. In such cases, you may be required to make a declaration and provide evidence of your status.
Need more information?
On the new measures and what they mean for you
What is FATCA?
The United States of America has put a new legislation in place to prevent tax evasion by those subject to U.S. taxes. This legislation is called the Foreign Account Tax Compliance Act (FATCA). FATCA requires financial institutions world-wide to report on U.S. taxpayers and some U.S.-owned entities, so called “U.S. persons”.
Who is in scope of FATCA?
This legislation applies to “U.S. persons”, both private individuals and some legal entities.
What is required by FATCA for private individuals?
FATCA requires financial Institutions to:
Identify customers for which one of the below US indicia are found. This potentially requires additional documentation.
For individual customers, these criteria typically include:
- The U.S. citizenship or U.S. residency. This includes having a green card allowing them to permanently reside in the United States as an immigrant; or
- Place of birth in the U.S.; or
- At least one address (mailing, residence, post office box or care-of) in the U.S.; or
- A U.S. telephone number; or
- Standing instructions from their ING account to an account in the U.S.; or
- Power of attorney on their account granted to a person with a U.S. address (mailing, residence, post office box or care-of).
For legal entities, the criteria include:
- the registered office or place of business is in the United States of America or
- the current (operating, mailing, post office box or c/o) address is in the United States of America.
Report information to local tax authorities. It concerns information regarding accounts held directly or indirectly (as beneficial owner) by US persons:
- the identity of the holders of the reportable account which are U.S. persons and US TIN.
- the reportable account numbers
- the balance of these accounts
- the financial income on these accounts.
The Belgian tax authorities will forward this information to the tax authorities of the United States (IRS – Internal Revenue Service).
Is FATCA applicable in Belgium?
Belgium, like most European nations, has decided to enter into an Intergovernmental Agreement (“IGA”) with the U.S. and to render FATCA applicable in its domestic legislation. As a consequence Belgian Financial Institutions must report the information to the Belgian Federal Public Service (“FPS”) Finance. FPS Finance will supply this information to the IRS.
What does FATCA mean for ING customers?
ING will contact all customers who show one or more U.S. indicia. Customers are required to confirm and evidence their status:
Individual customers need to fill in a W-8BEN form (Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding). Visit the website of the IRS for more information. Additionally, a Certificate of Loss of Nationality of the United States must be provided if an individual no longer has U.S. citizenship (thus also when born in the United States).
Legal entities need to fill in a W-8BEN-E form (Certificate of Status of Beneficial Owner for United States Tax Withholding and Reporting). In this document, the company itself declares what her status is under FATCA. See the website of the IRS for more information. Please note that some companies, although not tax liable in the United States, may still be subject to reporting to the IRS! As an example, there are special rules for financial institutions and for passive entities with U.S. UBOs.
ING continues to service U.S. citizens for accounts and savings as long as they are willing to deliver the required FATCA documentation.
New clients for whom U.S. indicia are found, will have to be documented before the relationship can be opened.
Without the required documentation within a very specific timeframe, ING Belgium will have to consider clients with U.S. indicia as U.S. persons. As a consequence, these clients’ data and accounts must be reported to the IRS (via the Belgian tax authorities). If customer is continuously non-responsive to requests for information, ING would takes appropriate action.
For more detailed information
On these new measures and their implications, please consult:
Investments for US
Given the existence of certain American regulations likely to have an extra-territorial scope, ING no longer accepts to perform transactions on financial instruments nor to provide services to open a securities account:
on someone’s behalf and for natural persons with American nationality and/or having a legal, fiscal or postal address in the United States States or a telephone number in the United States, or a permanent US resident card (“Green Card���);
on which a proxy has been given to a person with American nationality and/or having a legal, fiscal or postal address in the United States or a telephone number in the United States, or a permanent US resident card (“Green Card”).
In the event of such service was provided nonetheless and in which the financial instruments were acquired and deposited on a securities account, ING would maintain the right, after having notified the client at least 60 calendar days in advance, to allow him/her the possibility to transfer such financial instruments to another financial institution, to sell the relevant securities at their market value and to close such securities account.
ING shall bear any costs, except where the client:
provided wrong information to ING about his/her nationality or their legal, fiscal or postal address or their telephone number in the United States, or their permanent US resident card (“Green Card”);
neglected to take all appropriate measures to limit such costs
In case of the client acquires American nationality subsequently, or notifies a new legal, fiscal or postal address in the United States or a telephone number in the United States, or a permanent US resident card (“Green Card”) to ING, ING shall end the possibility for the client to perform transactions on financial instruments.
Furthermore, after having notified such decision to the client and having allowed a period of 60 calendar days to transfer such financial instruments to another financial institution, the financial instruments still on the securities account shall be sold at their market value and the securities account shall be closed. In that case ING shall not bear any costs or charges.