FATCA

What is FATCA?

FATCA stands for the Foreign Account Tax Compliance Act (FATCA). It was signed into law in 2010 as part of Hiring Incentives to Restore Employment (HIRE) Act.

FATCA is designed to prevent tax-evasion by U.S. citizens or residents holding foreign accounts or offshore investments. Under the FATCA regulations, foreign financial institutions (FFIs) must report to the IRS information about financial accounts held by U.S. taxpayers, or by foreign entities in which U.S. taxpayers hold a substantial ownership interest. 

How does FATCA impact Tradu and its clients?

To be FATCA compliant, Tradu must register its own FFIs with the IRS. In addition, FATCA regulations require Tradu to review existing onboarding and withholding processes and enhance them to comply with the regulations.

As part of an enhanced client onboarding process, additional documentation may be requested for clients holding accounts at Tradu. For instance, Tradu may need to obtain tax forms (i.e. W9/W8 series documents), from both new and existing accountholders in order to identify the client's tax classification.

In what cases do I need to submit a Form W-9/W8-BEN/W8-BEN-E to Tradu?

In order to determine if tax withholding is applicable, Tradu must authenticate the residency of its accountholders. For instance, if an account is held by a non U.S. citizen or non U.S. registered business entity, Tradu may require a Certification of Foreign Status, such as Form W8-BEN or W8-BEN-E for the account. Similarly, if an account is held by a U.S. citizen, U.S. resident alien or U.S. business entity, the accountholder may be required to certify his/her tax status by completing a Form W-9 or equivalent.

How will I know what Form to complete?

U.S. citizens or corporations may complete a W-9 form. Instructions for non-US citizens or corporations can be found in detail here, and are generally outlined below for your convenience:

The outline provided above is not intended to be exhaustive and is not warranted or guaranteed by Tradu as to its completeness or accuracy. For assistance with selecting and completing the tax Form applicable to you, please consult a qualified tax professional.

Will Tradu withhold taxes on my account?

Under the new FATCA regulations, withholdable payments do not include foreign exchange payments. Although gains on foreign exchange contracts are generally reported to the IRS as gross proceeds, FATCA regulations appear to apply to proceeds from the sale or disposition of property capable of producing interest or dividends from sources within the United States. Tradu potentially may withhold on dividend equivalent amounts you receive on CFD investments depending on their specifics.  Of note, this is subject to change if FATCA regulations are amended or revised. Please consult a qualified tax professional for additional assistance.

What is an Intergovernmental Agreement or IGA?

An Intergovernmental Agreement (IGA) is a bilateral agreement between the U.S. government and a country's tax authority that facilitates compliance with FATCA. More than 100 countries have concluded an IGA with the US government.

* In countries with a Model 1 IGA, FFIs will comply under local legislation and report to their local tax authority; in turn, the local tax authority will exchange information with IRS. * In countries with a Model 2 IGA, FFIs will comply with local legislation to enter into agreements with, and report directly to the IRS.

Where can I find more information about FATCA?

The IRS website offers additional information regarding FATCA compliance. You may also reference the U.S. Department of Treasury website for supplementary information on IGAs.

DISCLOSURE

References: This information is for references purposes only, and reliance on the information contained herein is not an alternative to legal advice from an attorney or other professional legal services provider. Specific questions should be referred to outside counsel. Tradu assumes no liability for errors, inaccuracies or omissions; does not warrant the accuracy, completeness of information, text, graphics, links or other items contained within these materials. Tradu will not accept liability for any loss, damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of, or reliance on the information contained herein.

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Stratos Global LLC is incorporated in St Vincent and the Grenadines with company registration No. 1776 LLC 2022. Stratos Global LLC is not required to hold any financial services license or authorization in St Vincent and the Grenadines in order to provide products and services related to foreign exchange and CFDs. Registered address: Euro House, Richmond Hill Road, Kingstown, VC0100, Saint Vincent and the Grenadines. Stratos Systems Limited with company registration No. 8430582-1 is a Securities Dealer licensed by the Financial Services Authority Seychelles (license number: SD147), providing listed shares. Business address: Block B, Global Village, Jivan’s Complex, Mont Fleuri, Mahe, Seychelles. Above mentioned entities are subsidiaries within the same corporate group of companies, collectively “Tradu”. Risk Warning: The value of your investment can fluctuate. Losses can exceed deposits. The provided information is not directed at residents of the United States, Canada, United Kingdom, European Union, Hong Kong, Australia, Israel or Japan and is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation. Tradu is headquartered at 20 Gresham Street, 4th Floor, London EC2V 7JE, United Kingdom. Stratos Markets Limited is authorised and regulated in the United Kingdom by the Financial Conduct Authority. Registration number 217689. Registered in England and Wales with Companies House company number 04072877. Stratos Europe Limited, previously FXCM EU Ltd is a Cyprus Investment Firm (“CIF”) registered with the Cyprus Department of Registrar of Companies (HE 405643) and authorised and regulated by the Cyprus Securities and Exchange Commission (“CySEC”) under license number 392/20. Stratos Trading Pty. Limited (AFSL 309763, ABN 31 121 934 432) is regulated by the Australian Securities and Investments Commission. Stratos South Africa (Pty) Ltd is an authorized Financial Services Provider and is regulated by the Financial Sector Conduct Authority under registration number 46534. Stratos Light Limited (Registrar number: 515234623), is incorporated in Israel and is an authorised and licensed company, supervised by the Israeli Securities Authority.

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