Finland: Updated FATCA and CRS FAQs
Updated FAQs concerning FATCA and common reporting standard (CRS) regimes
Updated FAQs concerning FATCA and common reporting standard (CRS) regimes
The Finnish tax administration on 25 October 2023 issued updated “frequently asked questions” (FAQs) concerning its FATCA and common reporting standard (CRS) regimes.
The updated FATCA and CRS FAQs relate to the following:
- Section 4 Special questions related to fulfilling reporting obligations: An additional question was added regarding how financial institutions need to handle the processing of recalcitrant accounts. A recalcitrant account is one when the account holder does not provide necessary information for determining its reportability as a U.S. account. The FATCA agreement does not require reporting for these accounts in the FATCA annual declaration, but reporting is an option for financial institutions to avoid certain obligations under U.S. law. Ideally, financial institutions would withhold U.S. withholding tax on U.S. sourced payments. However, the Finnish tax administration cannot handle this tax collection. Under the FATCA agreement, financial institutions are allowed to report these recalcitrant accounts on their FATCA annual return. Such reporting treats the accounts like U.S. reportable accounts, which also means that financial institutions need to use the appropriate replacement tax identification number (TIN) code in the absence of a U.S. TIN. Accordingly, financial institutions need to choose between withholding the tax, reporting the account in the FATCA annual declaration, or closing the accounts if the account holders are reluctant to provide the required information.
Read a November 2023 report [PDF 373 KB] prepared by the KPMG member firm in Finland
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