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23rd May 2016


FBAR Reporting Deadline for US Persons

Dear Client,

 

We are advising that all United States persons that have a financial interest or signature authority over a foreign financial account, including a bank account, brokerage account, mutual fund, trust, or other type of foreign financial account, exceeding certain thresholds, are required to report the account yearly to the US Department of Treasury by electronically filing a Financial Crimes Enforcement Network (FinCEN) 114, Report of Foreign Bank and Financial Accounts (FBAR), according to the Bank Secrecy Act.

 

Please note that United States person includes U.S. citizens; U.S. residents; entities, including but not limited to, corporations, partnerships, or limited liability companies, created or organized in the United States or under the laws of the United States; and trusts or estates formed under the laws of the United States.

 

The United States persons are required to file an FBAR if:

 

1.  the United States person had a financial interest in or signature authority over at least one financial account located outside of the United States; and

2.  the aggregate value of all foreign financial accounts exceeded $10,000 at any time during the calendar year reported.

 

A person who holds a foreign financial account may have a reporting obligation even when the account produces no taxable income. The reporting obligation is met by answering questions on a tax return about foreign accounts (for example, the questions about foreign accounts on Form 1040 Schedule B) and by filing an FBAR. The FBAR is a calendar year report and must be filed on or before June 30 of the year following the calendar year being reported.

 

A person who fails to properly file a complete and correct FBAR may be subject to a civil penalty not to exceed $10,000 per violation for non-willful violations that are not due to reasonable cause. For willful violations, the maximum of the penalty may be US$100,000 or 50 percent of the balance in the account at the time of the violation, for each violation.

 

Please consult your US tax advisor if you have any questions regarding your reporting requirements.