The document discusses the impact of the Foreign Account Tax Compliance Act (FATCA) on financial institutions in the Netherlands. It provides an overview of FATCA, including its goal of combating tax evasion by US persons holding offshore accounts. It outlines key requirements for foreign financial institutions, such as identifying and reporting US persons' accounts to avoid withholding taxes. It also discusses the bilateral agreement signed between the US and Netherlands to reduce administrative burden and exchange tax information. Finally, it lists major milestones and key players for Dutch financial institutions to comply with FATCA requirements.

1. Foreign Account Tax
Compliance Act
(FATCA) impact to
Financial Institutions
in the Netherlands
Henk-Jan van der Klis
Financial Services
Domain Solutions

2. The agenda for the next 6 months…and beyond
 FATCA in a nutshell
 US Person for US income taxes
 Key topics for Netherlands Financial Institutions
 Major milestones in The Netherlands
 Key players
Foreign Account Tax Compliance Act
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3. FATCA in a nutshell
 US enacted Foreign Account Tax Compliance Act (FATCA) in 2010 as part
of Hiring Incentives to Restore Employment (HIRE) Act
 Combat tax evasion by US Persons holding investments in offshore locations
 Additions to US Internal Revenue Code
 Requirements imposed on Foreign Financial Institutions to identify, review and report US
Persons and their US Reportable Accounts, plus withholding.
 Non-compliance by a Foreign (non-US) Financial Institution would invoke a 30%
withholding tax on gross proceeds from US activities.
 Bilateral intergovernmental agreements to reduce administrative burden,
relieve withholding requirements and (optional) reciprocity of tax
information exchange to enhance tax filing and reporting.
 On December 18, 2013 The Netherlands signed a bilateral agreement on
the implementation of FATCA.
Foreign Account Tax Compliance Act
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4. Who is a US Person for US income taxation?
 US Citizen
 You are liable for US income taxes whether you are a citizen who was born in
the United States or outside of the United States with at least 1 parent who is a
US Citizen. If you are a naturalized citizen, you are also considered a US
Person.
 US Resident
 Meet the Substantial Presence Test by being be physically present in the United
States on at least: 31 days during the current year, and 183 days during the 3year period that includes the current year and the 2 years immediately before
that, counting: All the days you were present in the current year, and 1/3 of the
days you were present in the first year before the current year, and 1/6 of the
days you were present in the second year before the current year.
 Meet the Green Card Test; this method applies to any person who has obtained
a US Green Card.
Foreign Account Tax Compliance Act
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5. Key topics for Netherlands Financial Institutions
 Read the book, don’t expect easy answers or shortcuts
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Treasury Regulations (544 pages US tax regulations)
Intergovernmental Agreement USA – NL
Memorandum of Understanding the IGA between USA and NL
Exchange of Notes regarding IGA USA – NL
 Legal entity analysis
 Which of your legal entities are classified as Netherlands Reporting Financial
Institutions?
 Which of your legal entities are exempt organizations subject to the IGA USANL?
 Which of your legal entities, incorporated outside The Netherlands are subject to
another IGA, or will have to enter an Foreign Financial Institution Agreement
with the US Internal Revenue Service?
Foreign Account Tax Compliance Act
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6. Key topics for Netherlands Financial Institutions
(continued)
 Product analysis
 Which of the products you will sell as per July 2014 classify as Financial
Account according to the IGA USA – NL?
 Which of the products you don’t sell anymore, but administer in a closed-book
administration classify as Financial Account according to the IGA USA – NL?
 Which of your products, classified as Financial Accounts are reported annually
to Belastingdienst? Which aren’t?
 Adapt your Product Approval & Review Procedure to check reviewed for FATCA
impact.
 New account opening
 Adjusted customer due diligence to determine whether Account Holders are US
Persons according to US tax regulations (which is different from US Persons in
other legal contexts)
 Implement customer self-certification procedure and check of reasonableness of
obtained documentation
Foreign Account Tax Compliance Act
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7. Key topics for Netherlands Financial Institutions
(continued)
 Change of circumstances
 Does a change the customer informs you about contain US indicia?
 Due diligence of beneficiaries of payments
 Implement customer self-certification procedure and check of reasonableness of
obtained documentation
 Due diligence of pre-existing (pre July 2014) Accounts

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Determine accounts not to be reviewed, identified or reported
Electronic search for US indicia
Enhanced review of High Value (>$1M) accounts
Implement customer self-certification procedure and check of reasonableness of
obtained documentation
 Reporting to Belastingdienst of US Reportable Accounts
 Banking and investment management products
 Cash Value Insurance or annuity contracts
Foreign Account Tax Compliance Act
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8. Key topics for Netherlands Financial Institutions
(continued)
 Don’t forget
 Register with the IRS and obtain a Global Institution Identifying Number (GIIN)
for every Foreign Financial Institution.
 Legal clauses and general/product terms must reflect FATCA requirements
 Payments to non-participating Foreign Financial Institutions
 Impact of rollovers
 Impact of participating in larger / more complex value chains with e.g.
Intermediaries, clearing houses, settlers, investment management funds.
 Inform your customers
Foreign Account Tax Compliance Act
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9. Major milestones in the Netherlands
 April 25, 2014: Foreign Financial Institutions registered with the IRS
through the portal will be included in first IRS Foreign Financial
Institutions List published June 2, 2014.
 July 1, 2014: requirements on identification and review of new Financial
Accounts apply.
 January 2015: reporting US Reportable Accounts and Account Holders to
Belastingdienst
 January 2016: reporting US Reportable Accounts and Account Holders to
Belastingdienst + reporting of payments to non-participating Foreign
Financial Institutions
 June 30, 2016: review pre-existing Accounts completed
Foreign Account Tax Compliance Act
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10. Key players in the Netherlands
 Internal staff
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Legal & Compliance
Tax
Product management, distribution & sales
Contract administration
IT
 Ministerie van Financiën
 Belastingdienst
 Verbond van Verzekeraars
 Nederlandse Vereniging van Banken
 Dufas
 Tax advisors
 Subject Matter Experts
 System providers / integrators
Foreign Account Tax Compliance Act
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11. Act now
 This presentation was just an introduction, a
trigger to get your attention.
 Don’t wait, act to get your organization compliant
to FATCA. You’ll need your time.
 Questions?




Henk-Jan van der Klis
 henkjan.vander.klis@capgemini.com
+31 6 215 777 35
 www.henkjanvanderklis.nl
Foreign Account Tax Compliance Act
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