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List of terms used for FATCA

Account holder

Agreement

Competent authority

Custodial institution

Data

Depository institution

Financial institution

Foreign financial institution

Global Intermediary Identification Number

Information exchange

Intergovernmental Agreement

International Data Exchange Portal

Investment entity

Memorandum of Understanding

Non-participating financial institution

Non-reporting financial institution

NZFI

Partner jurisdiction

Principal user

Provision and exchange of data

Reporting financial institution

Tax Identification Number 

United States Internal Revenue Service

Withholding agent

Withholdable payments

 

Account holder

Term used to describe an entity, individual or non-individual, that has a source of FATCA-related income from a financial institution.

Agreement

Within the context of international tax, an agreement has the same standing as a treaty.

Competent authority

Under IGA definitions, a Competent Authority is:

  • in the United States, the Secretary of the Treasury or his delegate
  • in New Zealand, the Commissioner of Inland Revenue or an authorised representative of the Commissioner.

Custodial institution

Under IGA definitions, an entity that holds, as a substantial portion of its business, financial assets for the account of others.

Data

Under FATCA, data relates to the content of bulk exchanges.

Depository institution

Under IGA definitions, an entity that accepts deposits in the ordinary course of banking or similar business.

Disclosure

FATCA reportable account information, this is submitted to Inland Revenue in the form of an XML file.

Double Tax Agreement (DTA)

Under section BH1 of the Income Tax Act 2007:

Meaning - s BH1(1)

Double tax agreement means an agreement that

has been negotiated for 1 or more of the purposes set out in subsection (2); and

has been agreed between:

  • the government of any territory outside New Zealand and the government of New Zealand; or
  • the Taipei Economic and Cultural Office in New Zealand and the New Zealand Commerce and Industry Office; and

has entered into force as a result of a declaration by the Governor-General by Order in Council under subsection (3)

Purposes - s BH1(2)

The following are the purposes for which a double tax agreement may be negotiated:

  • to provide relief from double taxation
  • to provide relief from tax
  • to tax the income derived by non-residents from any source in New Zealand
  • to determine the income to be attributed to non-residents or their agencies, branches, or establishments in New Zealand
  • to determine the income to be attributed to New Zealand residents who have special relationships with non-residents
  • to prevent fiscal evasion
  • to facilitate the exchange of information
  • to assist in recovering unpaid tax.

Financial Institution (FI)

From the perspective of administering FATCA within New Zealand, this relates to financial institutions that are paying tax in New Zealand.

Foreign financial institution (FFI)

From the perspective of the country requiring FATCA information. For the US, this is all financial institutions that are not United States based.

Foreign jurisdiction

For NZ DTAs and FATCA, a country other than New Zealand who we have treaties with.

Global Intermediary Identification Number (GIIN)

The number issued by the US IRS when a foreign financial institution registers for FATCA.

Information exchange

Within the context of international taxation and OECD practices, the term 'information exchange' has specific meaning.

When referring to an 'information exchange', this only relates to the information sent between foreign jurisdictions. It does not relate to any information coming into the New Zealand Inland Revenue from any customers.

Intergovernmental Agreement (IGA)

Agreement between the United States and New Zealand to support a Model 1 implementation of FATCA.

International Data Exchange Portal (IDEP)

Inland Revenue’s web portal for FATCA submissions.

Investment entity

Under IGA definitions, an entity that conducts a business, or is managed by an entity that conducts as a business, one or more of the following activities or operations on behalf of the customer.

  • Trading in money market instruments, foreign exchange, instruments, securities, commodity futures trading.
  • Individual and collective portfolio management.
  • Investing, administering, managing funds or money on behalf of other persons.

Memorandum of Understanding (MOU)

A document describing a bilateral or multilateral agreement between two or more parties. It expresses a convergence of will between the parties, indicating an intended common line of action. It is often used in cases where parties either do not imply a legal commitment or in situations where the parties cannot create a legally enforceable agreement.

Non-participating financial institution (NPFI)

A reporting New Zealand FI that has been identified by the United States as having significant non-compliance with the obligations under the IGA, where the non-compliance has not been resolved and the United States has determined that the Financial Institution shall be treated as an NPFI. An NPFI also includes a 'non-participating FFI' as that term is defined in US Treasury Regulations.

Non-reporting financial institution

Under IGA definitions, any New Zealand FI or other entity resident in New Zealand that is identified in Annex II of the IGA as a non-reporting NZ FI or that otherwise qualifies as a deemed-compliant FFI, an exempt beneficial owner, or an excepted FFI under relevant US Treasury regulations.

NZFI

New Zealand financial institution. A financial institution that is resident in New Zealand (excluding any branches located outside New Zealand) and any branch of a financial institution not resident in New Zealand, if such a branch is located in New Zealand.

Partner jurisdiction (PJ)

Under IGA definitions, a jurisdiction that has in effect an agreement with the United States to facilitate the implementation of FATCA.

Principal user

IDEP user authorised to enrol and submit disclosures on behalf of a financial institution

Provision and exchange of data

The provision of data is the activity carried out by the financial institution.

The exchange is the act of giving one thing and receiving another in return - this crosses over with the 'reciprocal' data exchange aspects of FATCA.

The data relates to the FATCA facts and statistics collected.

Reporting financial institution

A Financial Institution that must report on all reportable accounts on an automatic basis.

Tax Identification Number (TIN)

The taxpayer identification number is an identification number used by the United States Internal Revenue Service to administer their tax laws.

It is the equivalent to the New Zealand Inland Revenue Number (IRD Number).

United States Internal Revenue Service (IRS)

The competent authority within the United States in relation to FATCA. They undertake a similar role to that of the Inland Revenue in New Zealand.

Withholding agent

A person that has control, receipt, custody, disposal or payment of a withholdable payment.

Withholdable payments

Covers various types of income and certain gross proceeds from the sale or disposition of property.