Catching Up with US Tax- FBARS
Foreign Account Tax Compliance Act (FATCA) is a US tax law that has a global impact. It became effective on 1 July 2014 and is intended to increase transparency and stop tax evasion. The law requires all foreign financial institutions on an annual basis to report foreign assets above the aggregate value threshold, of US persons.
US persons are those who live in the US, or were born in the US and living in another country, however, have not given up their US citizenship, or people who reside in the US or spend a substantial number of days in the US each year. US corporations, partnerships, estates and trusts are treated as a US person in FATCA for tax purposes.
Foreign assets include financial accounts provided by a foreign financial institution, which does not include a US branch of a foreign financial institution or the foreign branch of a US institution. Stocks, securities, financial instruments or contracts issued by someone other than a US person are also foreign assets.
The assets must be reported on the Form 8938. If you are not required to file an income tax return you do not have to file the Form 8938 even if you meet the below thresholds. If you have already reported foreign assets on other forms you will not need to report for a second time on the Form 8938.
Note: FACTA is in addition to other requirements such as the Report of Foreign Bank and Financial Accounts (FBAR)