Under the International Government Agreements, concluded by all EU Member States and the US Foreign Account Tax Compliance Act ("FATCA Law"), adopted to implement an agreement between the United States ("U.S.") and the EU Member States governments on international tax compliance and an EU Directive on mandatory automatic exchange of information in the field of taxation (2014/107/EU), adopted to implement the OECD common reporting standard ("CRS Law"), we as the Financial Institutions, providing the financial accounts and payment services to you under the Legal Agreement and as a data controllers, inform you that the following data will be collected and may be exchanged or otherwise processed for the purposes of the aforementioned laws (assuming they apply) and in accordance with them:
Your name;
Your address;
Your country (or countries) of (deemed) tax residence;
Your Tax Identification Number(s) issued by your country or countries of tax residence, and, where applicable, your U.S. Tax Identification Number (U.S. TIN);
Your place and date of birth;
Your account number (or substitute account number, identifying your funds held);
Your account balance or value as at 31 December of any year during which the account is held;
If you qualify as a specified U.S. person under FATCA Law and/or as a reportable person under CRS Law and assuming the FATCA Law and CRS Law impose obligations on the Financial Institutions (in either case, as a "Reportable Account Holder"), this information will be automatically exchanged by the respective Financial Institution, as a reporting financial institution under these laws, with the local tax authorities in the home member state of the respective Financial Institution. The latter will exchange this information with the U.S. Internal Revenue Service if FATCA Law applies and/or, if CRS Law applies, with the competent authority or authorities of your respective country or countries of tax residence that are participating jurisdictions under CRS Law.
The information listed above will be exchanged with the local tax authorities in the home member state of the respective Financial Institution for any calendar year during which you are or become a Reportable Account Holder. Such data will consequently continue to be processed by us until it is no longer necessary for the purposes for which they were processed.
Under FATCA and CRS Laws, you are obliged to provide any additional information that might be required from time to time by the Financial Institutions to apply these laws. Failure to do so in time may give rise to a reporting by the respective Financial Institution of your information to the local tax authorities which will in turn exchange this information with the authorities mentioned above. You have the right to access the information that is exchanged with the local tax authorities and, as the case may be, a right to rectify this information. To exercise these rights, you should proceed in accordance with the Legal Agreement for Papaya.
References to the FATCA Law and CRS Law include references to any rules based on common-reporting standards agreements that may be applicable under the applicable law as well as any legislation that may amend or replace these rules, laws and agreements.
About CRS
Following the implementation of FATCA, the Organisation for Economic Cooperation and Development (“OECD”) developed a new global reporting standard for automatic exchange of Financial Account information in tax matters, referred to as the Common Reporting Standard (“CRS”). CRS is intended to enable the automatic exchange of information between Participating Jurisdictions.
On a European level, through the adoption of EU Council Directive 2014/107/EU (“DAC2”), the European Union (“EU”) effectively incorporated CRS across EU Member States thereby requiring EU tax authorities to automatically exchange information held by Financial Institutions in respect of Financial Accounts that are held by EU residents. DAC2 and CRS were implemented into Maltese legislation with effect from 1 January 2016 (the “CRS Regulations”).
In line with the CRS requirements, financial institutions in the participating jurisdictions are obliged to obtain certain information from their customers and share this information with the local tax authorities. The intent behind this is to identify the tax residency of customers.
How does this affect me?
Under the CRS, Papaya is required to identify whether you are a tax resident in one country and hold an account in another one. To do this, we need to collect certain information about you and your business and report it to the tax administration.
What information will Papaya gather under CRS?
To ensure convenience and make the process as easy as possible for our clients, we collect all the required information during the registration. In case we need additional details, we will get in touch with you.
Why do I need to provide information on my jurisdiction(s) of tax residency?
Under the CRS, tax authorities require Financial institutions such as Papaya to collect and report information regarding their clients’ accounts and tax statuses.
The Foreign Account Tax Compliance Act (“FATCA”), effective July 1, 2014 is a new legislation introduced by the Unites States Department of Treasury and the U.S. Internal Revenue Service (“IRS”) to encourage better tax compliance by preventing U.S. Persons from using Papaya’s and other Financial institutions to avoid U.S. taxation on their income and assets.
In Malta the principles of FATCA have been brought into local laws, pursuant to the Intergovernmental Agreement signed between the Government of the Republic of Malta and the Government of the United States of America. Under this Agreement, Papaya will be reporting information relating to U.S. accounts to the Inland Revenue Department of Malta.
Papaya is committed to being fully FATCA compliant and to confirm its customers’ FATCA status. Where necessary, we may have to obtain further information and documentation such as Papaya declarations and/or IRS forms, which will enable our customers to declare and confirm their tax status to us for the purpose of FATCA.
The IRS forms that we may ask from you are a self-certification and Papaya is not required to verify that any U.S. Tax Identification Number (“TIN”) or information supplied by customer is correct.
Where a customer fails to provide when requested further information and documentation to provide a U.S. TIN or evidence of non-U.S. status and the account becomes active, Papaya is required to treat such accounts as a Reportable account for FATCA purposes.
Papaya makes no guarantee of the accuracy and completeness of the IRS forms and shall not be responsible for any errors nor shall Papaya be liable for any loss that results from reliance upon the information provided in the IRS forms and guidance.
Entities that issue payment cards that can be pre-loaded with funds in excess of $50,000 to be spent at a later date, such as a pre-paid cards or “e-money” are to be considered to be Depository Institutions for the purposes of the FATCA Agreement and therefore have an obligation to report certain information regarding those identified reportable accounts to the Commissioner for Revenue.
What is the key difference between CRS and FATCA?
In fact, FATCA and CRS have similar characteristics because their main goal is to combat tax evasion and create common standards for exchanging information on financial accounts. However, CRS has much broader scope. While FATCA is focused solely on U.S. persons, CRS requires reporting of tax residents of “CRS-participating countries”.
What is the impact of FATCA?
Each year, Financial institutions such as Papaya are required to share information on financial accounts of U.S. persons.
How do I know if I am affected?
FATCA legislation will affect both personal and business customers who are treated as a ‘US Person’ for US tax purposes. The FATCA legislation will also affect certain types of businesses with US owners.
The term US person includes the following (but is not limited to):
A citizen of the US, including an individual born in the US but resident in another country (who has not given up their US citizenship)
A person residing in the US, including US green card holders
Certain persons who spend a significant number of days in the US each year
US Corporations, US Partnerships, US estates and US trusts
For more information regarding FATCA, please visit the IRS website or contact your tax professional.
What is a tax identification number (TIN)?
This is your unique number issued in your jurisdiction to you as a tax payer. However we are aware that some jurisdictions do not issue a specific tax numbers.
I am currently in the process of registering for a TIN number, how should I proceed?
Please advise the Papaya as soon as possible of your Tax number and we will update our records accordingly.
Where can further information on FATCA or CRS be obtained?
More information about Exchange of tax information under FATCA can be found at US Internal Revenue Service webpage:
https://www.irs.gov/
Please note that Papaya does not provide, and this document does not constitute, tax or legal advice.
For private clients: We ask you to follow the link to our site
https://client.blackcatcard.com/#/tin and complete/update the “Individual Self-Certification relevant for FATCA and CRS purposes”.