• Skip to content
  • Skip to navigation

Grant Thornton Australia

Grant Thornton uses cookies to monitor the performance of this website and improve user experience.

If you are happy to accept cookies from this site, please check the box.

To find out more about cookies, what they are and how we use them, please see our privacy notice, which also provides information on how to delete cookies from your hard drive.

How to be COVIDSafe when visiting Grant Thornton offices. Find out how

Global site
  • Global site
  • Algeria
  • Botswana
  • Cameroon
  • Egypt
  • Ethiopia
  • Gabon
  • Guinea
  • Kenya
  • Libya
  • Malawi
  • Mauritius
  • Morocco
  • Nigeria
  • Namibia
  • Senegal
  • South Africa
  • Togo
  • Tunisia
  • Uganda
  • Zambia
  • Zimbabwe
  • Anguilla
  • Antigua
  • Argentina
  • Aruba, Bonaire, Curacao and St. Maarten
  • Bahamas
  • Barbados
  • Bolivia
  • Brazil
  • British Virgin Islands
  • Canada LLP
  • Canada RCGT
  • Cayman Islands
  • Chile
  • Colombia
  • Costa Rica
  • Dominica
  • Ecuador
  • El Salvador
  • Grenada
  • Guatemala
  • Honduras
  • Mexico
  • Montserrat
  • Nicaragua
  • Panama
  • Paraguay
  • Peru
  • Puerto Rico
  • St Kitts
  • St Lucia
  • St Vincent and the Grenadines
  • Trinidad & Tobago
  • United States
  • Uruguay
  • Venezuela
  • Turks & Caicos
  • Afghanistan
  • Australia
  • Bangladesh
  • Cambodia
  • China
  • Hong Kong
  • India
  • Indonesia
  • Japan
  • Korea
  • Malaysia
  • Mongolia
  • Myanmar
  • New Zealand
  • Pakistan
  • Philippines
  • Singapore
  • Taiwan
  • Thailand
  • Vietnam
  • Albania
  • Armenia
  • Austria
  • Azerbaijan
  • Belarus
  • Belgium
  • Bosnia and Herzegovina
  • Bulgaria
  • Channel Islands
  • Croatia
  • Cyprus
  • Czech Republic
  • Denmark
  • Estonia
  • Finland
  • France
  • Georgia
  • Germany
  • Gibraltar
  • Greece
  • Hungary
  • Iceland
  • Ireland
  • Isle of Man
  • Israel
  • Italy - Bernoni
  • Italy - Ria
  • Kazakhstan
  • Kosovo
  • Kyrgyzstan
  • Latvia
  • Liechtenstein
  • Lithuania
  • Luxembourg
  • Macedonia
  • Malta
  • Moldova
  • Monaco
  • Netherlands
  • Northern Ireland
  • Norway
  • Poland
  • Portugal
  • Romania
  • Russia
  • Serbia
  • Slovak Republic
  • Slovenia
  • Spain
  • Sweden
  • Switzerland
  • Tajikistan
  • Turkey
  • Ukraine
  • UK
  • Uzbekistan
  • Bahrain
  • Egypt
  • Jordan
  • Kuwait
  • Oman
  • Qatar
  • Saudi Arabia
  • United Arab Emirates
  • Yemen
  • Lebanon
Grant Thorton Logo

Grant Thornton Logo Grant Thornton Logo

Contact us
  • Insights
  • Services
  • Industries
  • Meet our people
  • Careers
  • News centre
  • Locations
  • About us
  • Audit
  • Tax
  • Private Advisory
  • Financial Advisory
  • Grant Thornton Consulting
  • Asia
Audit Home
  • Audit methodology
  • Audit technology
  • Financial reporting advisory
Tax Home
  • Corporate tax
  • Employee equity reward schemes
  • Fringe benefits tax
  • Global mobility services
  • GST & indirect tax
  • International tax
  • Payroll assurance
  • Research & development
  • Tax compliance
  • Tax governance & risk management
  • Tax in mergers & acquisitions
  • Tax lawyers
  • Transfer pricing
Private Advisory Home
  • Family Business Consulting
  • Family office services
  • Private wealth
  • Superannuation
Financial Advisory Home
  • Corporate finance
  • Debt advisory
  • Forensic consulting
  • Payments advisory
  • Restructuring advisory
Grant Thornton Consulting Home
  • Business risk
  • Human capital
  • Performance improvement
  • Strategy & growth
  • Technology consulting
  • GNC Group Consulting
Asia Home
  • China practice
  • India practice
  • Japan practice
  • Agribusiness, food & beverage
  • Automotive dealers
  • Education
  • Energy & resources
  • Financial services
  • Health & aged care
  • Life sciences
  • Manufacturing
  • Not for Profit
  • Professional services
  • Public sector
  • Real estate & construction
  • Retail & consumer products
  • Technology & media
Agribusiness, food & beverage Home
Bite Size Dealtracker Food, Beverage & Agribusiness industry insights
Key insights for the Australian Food, Beverage & Agribusiness industry.
Financial services Home
  • Banking
  • Fintech
  • Private Health Insurance
  • Superannuation
  • Asset management
  • BEAR FAQs
  • Open banking
Royal Commission wrap up Top 10 things for Financial Services providers
Eleven months on from the first round of hearings for the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, Commissioner Hayne’s final report has been released.
Health & aged care Home
Aged Care Royal Commission Perspectives on the Future of Ageing
Transitions in ageing are not consistent and systematic as they are described by our ageing systems. Sometimes they are incremental, sometimes accidental, sometimes monumental, and they are always personal. We can create something better.
Life sciences Home
Biotechnology Industry Position survey Australia's biotechnology industry drives economic growth
The 2019 Biotechnology Industry Position survey conducted by Ausbiotech and supported by Grant Thornton has revealed that new technologies across regenerative medicine and medicinal cannabis are disrupting the industry, and Australia's global strength in clinical trials continues to drive contributions to the economic and social fabric of the country.
Manufacturing Home
mid-sized business report Manufacturing is critical to our economy – how can we support the sector?
Although the knock-on effects of the Australian automotive industry exiting our country are yet to be fully understood, the industry is evolving, and manufacturing continues to be a major employer and critical to our overall economy.
Not for Profit Home
NATIONAL OUTCOMES MEASUREMENT PROGRAM A practical framework
Royal Commissions and federal budgets are critical things for Nonprofit human service providers to be thinking about at this point in time.
Real estate & construction Home
mid-sized business report Supporting affordable housing requires planning, certainty – and tax reform
There is a lot of noise around the property sector at the moment – and it’s not all positive. Prices are down – but this shouldn’t be a surprise when some markets (namely Sydney & Melbourne) saw unprecedented hikes in recent years.
Retail & consumer products Home
GNC Group Consulting The Technology Trap: Online innovation in retail
I recently attended the NRF Retail Big Show in New York, an overwhelming smorgasbord of retail technology and new store concepts.
Technology & media Home
  • Telecommunications
Scaling-up for Growth From start-up to scale-up
Navigating the complexities of growth and maintaining previous success is a challenge for all mid-size businesses.
  • Working at Grant Thornton
  • Student opportunities
  • Experienced careers
  • Contact us
Working at Grant Thornton Home
  • Flexibility
  • Your career and development
  • Diversity and inclusion
  • In the community
  • What we offer you
Student opportunities Home
  • Graduates
  • Vacationer Program
  • The application process
  • FAQs
  • Student application tips and tricks
Experienced careers Home
  • Client spotlight
  • Grant Thornton Australia | Audit, Tax and Advisory
  • Client alerts
  • 2015
  • Act now to be ready for FATCA

Act now to be ready for FATCA

10 Feb 2015
  • 2015
  • Transitioning support for auto supply chain companies
  • Innovation in Australia
  • New FBT entertainment cap introduced
  • New reporting obligations for multinational companies
  • Unlocking super
  • The truth behind business failure
  • 2015 Distinguished Family Business of the Year
  • Melbourne plan refresh: The 2050 metropolitan planning strategy
  • Tax alert: GST & remote housing accommodation
  • The Federal Government's Tax discussion paper released today
  • New fees hurt developers’ bottom line
  • Payroll Tax Rebate – Action before 23 November 2015
  • New South Wales State Budget 2015-16
  • Western Australian Real estate & construction update
  • Victoria Real estate & construction update
  • South Australia Real estate & construction update
  • Queensland Real estate & construction update
  • New South Wales Real estate & construction update
  • State revenue offices and the ATO information sharing
  • Redundant corporate entities?
  • Streamlined process for new business applications
  • Imported building materials under scrutiny
  • Tightened lending rules threaten industry growth
  • Any GST hike must be offset
  • New PM appoints Minister for Cities
  • Reforming Australia’s Federation and Tax System
  • A message from our Global Head of Real Estate & Construction
  • Adelaide CBD property outlook – Key considerations
  • The deadline is looming for the Exploration Development Incentive
  • Valuing Employee Share Schemes (ESS) – Impending Tax Changes
  • Queensland State Budget 2015-16
  • New restrictions on entertainment salary packaging
  • NADA conference day three
  • NADA conference day two
  • Do you have the keys to NADA 2015? Day 1
  • South Australian State Budget 2015-16
  • 27 Pay Periods in 2015/16
  • Corporate simplification and solvent liquidations
  • Fringe Benefits – Hidden FBT and deemed dividend issues
  • NSW Payroll Tax Rebate
  • SuperStream compliance
  • Should I maintain my SMSF?
  • Art and collectables as alternative investments
  • Tax alert: GST ruling published
  • Western Australian State Budget 2015-16
  • New funding opportunities for Australian food & beverage companies
  • Super fund investment choice – What are the options?
  • Nominating beneficiaries for your superannuation benefits
  • Superannuation consolidation
  • Victorian State Budget 2015/16
  • Encouraging innovation in Australia’s Life Sciences and Biotechnology industries
  • Fraud in focus: Fraud and corruption in Banking and Financial Services
  • Tax alert: Refunds of excess GST
  • New Employee Share Scheme Bill Introduced
  • SuperStream employer webinars
  • Staying vigilant against fraud
  • Tax Alert: Are you meeting your employment tax obligations?
  • Tax alert: No change to R&D tax offset rates
  • Act now to be ready for FATCA
  • Tax alert: Changes to Employee Share Scheme Tax Laws

The Foreign Account Tax Compliance Act (FATCA) obligations apply from 1 July 2014 with the first reporting (of the 2014 calendar year information) due to the ATO 31 July 2015. The ATO will then pass on the information to the Internal Revenue Service (IRS).

When does FATCA apply from?
The Foreign Account Tax Compliance Act (FATCA) obligations apply from 1 July 2014 with the first reporting (of the 2014 calendar year information) due to the ATO 31 July 2015. The ATO will then pass on the information to the Internal Revenue Service (IRS). 

The onus is on Australian financial institutions to either prove that they are not a reporting Australian financial institution (or an exempt reporting Australian financial institution), or start implementing processes and procedures to identify any US reportable accounts and to capture the relevant information on those accounts for FATCA reporting purposes.   

Who does FATCA apply to?
The FATCA obligations apply to an Australian entity which is classified as a reporting Australian financial institution and maintains US reportable accounts held by specified US persons as defined in the Australia-US Intergovernmental Agreement (IGA).

Reporting Australian financial institution
Reporting Australian financial institution means the following financial institutions that are resident in Australia:

  • custodial institution
  • depository institution
  • investment entity
  • specified insurance company

They generally includes banks, some building societies, some credit unions, specified life insurance companies, private equity funds, managed funds, exchange traded funds and some brokers.

However, where an Australian financial institution qualifies as an exempt beneficial owner or deemed-compliant Foreign Financial Institution (FFI) under the IGA or relevant US Treasury Regulations, it is not a reporting Australian financial institution. 

These exempt institutions include certain Not for Profit international organisations, superannuation funds, some local banks and financial institutions and investment advisors and managers.

US reportable account
US reportable account means a financial account identified as being held by a specified US person or a non-US entity controlled by a specified US person (i.e. passive NFFE) after applying the due diligence procedures as prescribed in the IGA.

However, certain accounts are specifically excluded from being a US reportable account such as certain superannuation and life insurance accounts.

What are FATCA obligations?
Under the IGA, a reporting Australian financial institution has the obligation to do the following in order to comply with FATCA if it maintains a US reportable account:

  1. Register to obtain a Global Intermediary Identification Number (GIIN).
  2. Apply due diligence procedures to identify any US reportable account and report certain information on these accounts to the ATO by 31 July after the end of the relevant calendar year.
  3. For each of the 2015 and 2016 calendar years, also report the name of each non-participating financial institution to which it has made payments, and the aggregate amount of the payments.

Due diligence procedures
The IGA sets out the due diligence procedures which a reporting Australian financial institution will need to follow in order to identify any US reportable account and account held by a non-participating financial institution which it maintains.

Alternatively, the reporting Australian financial institution may adopt the procedures in the relevant US Treasury Regulations in lieu of those in the IGA to identify such accounts.

Different due diligence procedures apply to individual accounts and entity accounts depending on whether they are pre-existing accounts as at 30 June 2014 or new accounts opened from 1 July 2014. In addition, de minimus thresholds apply to certain accounts such that they are not required to be identified or reported as a US reportable account, as discussed above.

We note that when assessing the relevant thresholds aggregation rules may apply to combine account values for account holders.

These due diligence procedures have been summarised below:

Pre-existing individual accounts

Lower value accounts
For individual accounts with a balance/value between US$50,001 (or US$250,001 for insurance/annuity contracts) and US$1,000,000 (Lower Value Account) as at 30 June 2014, the reporting Australian financial institution must review its data electronically by 30 June 2016 for a range of specified US indicia.  

Where any of the US indicia are present and the account is identified as being held by a specified US person, the account must be treated as a US reportable account unless specified documentation can be obtained from the account holder which indicates the contrary.

Higher value accounts
For individual accounts with a balance/value exceeding US$1,000,000 as at 30 June 2014, or increasing to more than US$1,000,000 as at 31 December 2015 or any subsequent year (High Value Account), a paper record search is also required if the reporting Australian financial institution’s electronic records do not contain all of the above US indicia relating to the account/account holder.

The paper record search may involve reviewing the customer master file, the most recent account opening contract and other documents collected in respect of the account in the last five years, to identify any US indicia. This process must be completed by 30 June 2015 for any High Value Accounts as at 30 June 2014.
In addition, if the relationship manager of a High Value Account has actual knowledge that the account holder is a specified US person, the account must be treated as a U.S reportable account.

New individual accounts

For any new individual accounts opened from 1 July 2014 (except those which meet the de minimus threshold and categories of accounts), the reporting Australian financial institution must obtain self-certification (that the account holder is neither a US citizen nor US tax resident) as part of the account opening process.

If the reporting Australian financial institution cannot obtain a valid self-certification, it must treat the account as a US reportable account.

Pre-existing entity accounts

For pre-existing entity accounts with a balance/value of more than US$250,000 as at 30 June 2014, and those with a balance/value of US$250,000 or less as at 30 June 2014 (but exceeding US$1,000,000 as at 31 December of 2015 or any subsequent years), the reporting Australian financial institution must apply specific due diligence procedures to identify any accounts being held by a specified US person, passive NFFE controlled by a U.S citizen/resident and non-participating financial institution.

Where such account has been identified as being held by a specified US person or a passive NFFE controlled by a U.S citizen/resident, the account will constitute a US reportable account. Where the account is held by a non-participating financial institution, the reporting Australian financial institution will need report the aggregate amount of payments made to and the name of the non-participating financial institution to the ATO for each of the 2015 and 2016 calendar years.

These due diligence procedures must be completed by 30 June 2016 for any pre-existing entity accounts with a balance/value that exceeds US$250,000 as at 30 June 2014.

New entity account

All new entity accounts are subject to specific due diligence procedures for the purposes of identifying any U.S reportable account, except for credit card or revolving credit facilities maintained by reporting Australian financial institutions which implement policies/ procedures to prevent excess payment by the account holder of more than US$50,000.  What information is required to be reported? 

Where an account has been identified as a US reportable account, the reporting Australian financial institution will need to report specified information to the ATO. Generally, this includes names, addresses and US tax identification numbers of account holders, account numbers, account balances or values, as well as interest, dividend and proceeds amounts.

There are transitionary periods which may impact the type of information required to be reported.

For more information please contact:

Peter Berg
Peter Berg
Partner Sydney
Email address https://au.linkedin.com/pub/peter-berg/27/937/230 Peter Berg VCard
View full profile
Share this page
  • Share this page on Facebook LinkedIn
  • Share this page on Twitter Twitter
  • Share this page on LinkedIn LinkedIn
  • Share this page on Wechat WeChat
  • Share this page via email Email
  • Follow us on youtube
  • Follow us on linkedin
  • Follow us on twitter
  • Follow us on facebook
Connectclose
  • Contact us
  • Locations
  • Meet our people
  • Subscribe
  • Staff portal
Aboutclose
  • About us
  • Careers
  • News centre
  • Client alerts
  • Grant Thornton Foundation
  • Grant Thornton Affinity
Legalclose
  • Privacy
  • Compliance and ethics
  • Disclaimer
  • Site map

© 2021 Grant Thornton Australia Limited – All rights reserved

    • EN
    • Contact us