The Foreign Account Tax Compliance Act (FATCA) is legislation enacted by the US government to ensure that its citizens and tax residents comply with US tax laws.
Australia and the US have signed an agreement to implement FATCA. In order to ensure that both countries’ tax laws are effectively enforced, Australian Financial Institutions are required to report US citizens’ or US tax residents’ revenue and income to the Australian Taxation Office. The aim of this legislation is to faciliate tax information sharing between the two countries. For more information on FATCA, please click on the button below:
This has a potential negative effect on SMSFs by increasing the compliance burden. However, the federal government has announced that it has entered into an agreement with the US that excludes SMSFs from the need to comply with FATCA. This means that SMSFs are exempt from the FATCA requirements. For more information, please see here.
Trustees should still be mindful of residency requirements that is relevant to Super Funds. This means all SMSFs must be regarded as residents in Australia to enjoy the concessional tax rate of 15%. For more information please refer to our residency page.