AEI-FATCA Information

For the AEI-FATCA forma and supporting notes, please click here.



Recent regulatory developments require that financial institutions, such as UBS, report relevant financial information to applicable tax authorities. In 2010, the US government enacted the Foreign Account Tax Compliance Act (FATCA) in order to enable the US Internal Revenue Service (IRS) to receive information on US Persons holding offshore accounts.

The FATCA concept has spread to other countries (e.g. the UK) and to the international community, the latest being the Organisation for Economic Co-operation and Development (OECD) resulting in a FATCA-like global standard for the exchange of tax information called the Automatic Exchange of Information (AEI). Both the AEI and FATCA regulations share the same objective, to enhance global tax transparency through the mandatory exchange of client tax information between Financial Institutions and tax authorities.

A key element to determine the FATCA and AEI status of a client is a self-certification completed by the client. UBS has developed specific Self-certification Forms for this purpose. By signing the form, you certify that you meet the requirements and conditions for the applicable FATCA and AEI status.



What is the purpose of FATCA?

FATCA was enacted by the United States to prevent and detect tax evasion by US taxpayers who are holding financial accounts outside the US with so-called "Foreign Financial Institutions – FFIs", which include non-US financial institutions such as UBS.

Like many other countries, the Australian Government entered into an Intergovernmental Agreement on FATCA with the US Government. Through this Intergovernmental Agreement, and the subsequent Australian legislation on FATCA, all Financial Institutions in Australia are required to comply with the FATCA requirements by performing certain due diligence, reporting and withholding obligations.

What is the impact of FATCA on Non-US clients?

Like any other FATCA compliant financial institution, UBS has an obligation to document the FATCA status of all clients holding a FATCA eligible product. The FATCA status of a client determines if any FATCA withholding and reporting is required. The FATCA status of a client is mainly determined by the client type. Additionally, US taxpayers who are either direct account holders or beneficial owners of a family or discretionary trust, or private investment company, will have to be reported to the U.S. tax authority via the Australian Taxation Office (ATO).



What is the AEI?

The Automatic Exchange of Information (AEI) is part of the Organization for Economic Co-operation and Development (OECD) led initiative to enable countries to tackle tax evasion by their residents who hold assets abroad. AEI closely follows the "Model 1" intergovernmental agreement developed by the USA to implement FATCA (see above).

Which countries will participate in AEI and when will they implement the regulations?

Over 90 jurisdictions have now signed up to implement the AEI requirements through either bilateral or multilateral agreements through a phased implementation.

How will AEI impact UBS clients?

The AEI regulations will change the way UBS onboards new clients and reports financial account information on new and pre-existing clients through the implementation of the Common Reporting Standard (CRS). CRS will require Financial Institutions to obtain tax residency information from both new individual and entity accounts and to review the same information from pre-existing clients over a defined period. Each Financial Institution will be required to report the client account information to its local tax authority for onward distribution to tax authorities in the country where the client is a tax resident.