Finland, Germany, and Austria are part of the FATCA agreement with the United States, under which these countries have agreed to exchange tax-relevant information to combat tax evasion. The agreement requires the parties to collect specific tax-related information on their customers and investors and transmit the collected information to the U.S. Internal Revenue Service (IRS).
When is an individual subject to U.S. taxation?
An individual is considered a U.S. taxpayer if at least one of the following conditions is met:
- Place of birth in the U.S.
- U.S. citizenship
- Dual citizenship of the U.S. and another country
- Holder of a "Green Card"
- U.S. tax residency (residing for at least 183 days per year)
- U.S. taxpayer identification number (SSN or TIN)
Does the scrutiny also apply to businesses or entities?
In addition to individuals, certain corporate and business accounts, as well as trust accounts, are also subject to scrutiny. If a U.S. taxpayer directly or indirectly owns or controls 25% or more of a non-U.S. company, and the majority of the company's income is derived from financial investments, the company's account will be classified as a U.S. account. In such cases, both the account and the U.S. taxpayer will be reported to the IRS. U.S. companies that are domiciled or managed in the U.S. are generally subject to reporting as well.
Due to FATCA reporting obligations, U.S. taxable individuals or companies cannot directly invest through the Invesdor platform.
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