Deemed Compliant FFI
Local banks, local FFI members of PFFIs and certain investment vehicles may be Deemed Compliant by the IRS for FATCA if they satisfy certain criteria.

Depository account
Includes: Commercial checking, savings, term deposits or thrift accounts, an account evidenced by a certificate of deposit or similar instruments, and any amount held with an insurance company under an agreement to pay interest.

Domicile (For UK tax purposes)
Domicile is not the same as nationality or residence. Broadly speaking you have your domicile in the country that is your ‘real’ or permanent home which, if you have left, you intend to return to. There are three types of domicile:

Domicile of origin
Everyone acquires a domicile of origin at birth. This is usually the country that your father considered to be his real or permanent home at the date of your birth. If your parents were not married when you were born, your domicile of origin comes from your mother.

Domicile of dependence
If you are legally dependent on another person, for example because you are a child, you will automatically have the same domicile as the other person – so if their domicile changes, yours will too. If you are a woman and you were married before 1974 you automatically acquired and retain the same domicile as your husband. But if you were a US national married to a man domiciled in the UK, you retained your US domicile for UK tax purposes.

Domicile of choice – changing your domicile
After the age of 16, you can change your domicile. To do this you will need to settle permanently in a country other than your previous country of domicile. You may be asked to provide evidence of this.
If you change your domicile you have a ‘domicile of choice’.

Dormant Account
A dormant account is an account treated as a dormant or inactive account under applicable laws otherwise the definition includes:
(i)If account holder has not executed a transaction on the account (or any other account) held by the FFI in the past 3 years
(ii)If account holder has not replied to queries from the FFI that maintains the account (or any other account) in the past 6 years

Direct tax
A tax that cannot be shifted to others, such as the federal income tax.

Documentation includes all information recorded in written or electronic form, stored in connection with a financial account.

Certificate of Loss of Nationality of the United States (DS-4083) issued by the Bureau of Consular Affairs division of the US Department of State to declare that US citizenship has been rescinded.


Earned Income Credit
A tax credit for certain people who work, meet certain requirements, and have earned income under a specified limit.

Effectively Connected Income

Electronic Funds Transfer (EFT)
A method of payment. It is convenient, helps prevent installment agreement defaults, and saves processing costs.

Employer Identification Numbers.  A federal tax identification number for entities.

Electronic filing (e-file)
The transmission of tax information directly to the IRS using telephones or computers.
Electronic filing options include (1) Online self-prepared using a personal computer and tax preparation software, or (2) using a tax professional.

Electronic Return Originator (ERO)
The Authorized IRS e-file Provider that originates the electronic submission of an income tax return to the IRS.

Excepted NFFE
A class of NFEEs that are outside of the scope for FATCA. They include publically traded non-US companies, foreign governments, international organisations, foreign central banks.

Excise tax
A tax on a “perceived” privilege.

Amount that taxpayers can claim for themselves, their spouses, and eligible dependents. There are two types of exemptions-personal and dependency.
Each exemption reduces the income subject to tax.


Foreign Account Tax Compliance Act. Refers to Chapter 4 of the US Internal Revenue Code, which was enacted by the Hiring Incentives to Restore employment (HIRE) Act on March 18, 2010.
FATCA requires non-US foreign financial institutions (FFIs) and non-US non-financial entities (NFFEs) to identify and disclose their US account holders and members.
Should they fail to do this, they will become subject to a new 30% US withholding tax with respect to any payment of US source income and proceeds from the sale of equity or debt instruments of US issuers (i.e. withholdable payments).

Income which is Fixed or Determinable, Annual or Periodical derived from gains, profits, and income, and includes payments such as interest (including original issue discount), dividends, rents, salaries, wages, premiums, and annuities.

Federal income tax
The federal government levies a tax on personal income.

Federal Insurance Contributions Act (FICA) Tax
A tax to fund benefits for retired workers and their dependents as well as for disabled workers and their dependents. Also known as the Social Security tax.

Foreign Financial Institution. A foreign financial institution is a foreign entity that (i) accepts deposits in the ordinary course of a banking or similar business; (ii) holds financial assets for the account of others as a substantial portion of its business; or (iii) is engaged (or holding itself out as being engaged) primarily in the business of investing, reinvesting, or trading in securities interests in partnerships, commodities or any interest (including a futures or forward contract or option) in such securities, partnership interests or commodities.  This broad definition includes not only traditional banks, but could also include but is not necessarily limited to, insurance companies, investment trusts, mutual funds, hedge funds and pension plans.

FFI Agreement
Agreement between the US Treasury and participating FFI to obtain, verify and report certain information about its account holders to the IRS. FFIs will be required to prove that accounts are not US as they are assumed US until the negative is proven.

Financial Institution – any entity that (i) accepts deposits in the ordinary course of a banking or similar business, (ii) holds financial assets for the account of others as a substantial portion of its business, or (iii) is engaged (or holding itself out as being engaged) primarily in the business of investing, reinvesting, or trading securities, partnership interests, commodities or similar financial instruments

Filing status
Determines the rate at which income is taxed. The five filing statuses are: single, married filing a joint return,
married filing a separate return, head of household, and qualifying widow(er) with dependent child.

Financial Account
Any depository account maintained by a financial institution, any custodial account maintained by a financial institution and any equity or debt interest in such financial institution (except interests which are regularly traded on an established securities market).

Flat tax
This is another term for a proportional tax.

Foreign Financial Assets
Specified foreign financial assets include: foreign financial accounts and foreign non-account assets held for investment (as opposed to those held for use in a trade or business such as foreign stock and securities), foreign financial instruments, contracts with non-US persons, and interests in foreign entities.

Foreign Person
A non-US Person.

Foreign Withholding Partnership.

Foreign Withholding Trusts

Did you Know?

  • Fact Seven

    Thanks to FATCA banks must disclose their American account holders to the IRS or local tax authority.
  • Fact Six

    The IRS is actively looking for non compliant US persons.
  • Fact Five

    It takes an average of 16 hours to do IRS Form 1040.
  • Fact Four

    There are over 500 IRS tax forms.
  • Fact Three

    Since 1916, illegal income has been taxable.
  • Fact Two

    US persons must file tax
    returns no matter where they live and work.
  • Text One

    7 million Americans abroad
    only 500,000 compliant

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