Customer Tax Operations

The CTO team at Ulster Bank doesn’t offer advice but we’re here to help you understand international tax regulations and practices, as well as our commitments to them. We deliver, maintain and continually improve compliant customer tax operations.

To combat tax evasion and avoidance, many governments now investigate where their citizens hold overseas assets. So while we were initially focused on supporting the Bank’s compliance with the US FATCA (Foreign Account Tax Compliance Act) requirements, our activity now includes working to a range of operational tax regulations.

We also consider the broader response of the bank to these regulations and how we meet our obligations to them. This enables the Bank to identify US or other citizens who may be liable for tax in their home jurisdiction and to report on those individuals or entities, in line with regulatory timescales. This will extend in 2016 to support the requirements of the global Common Reporting Standard (CRS). 

You may be aware that the USA was one of the first countries to legislate on global tax evasion and avoidance. This is now supported by governments around the World. FATCA aims to identify and report ‘US persons’ responsible for paying US tax, who hold accounts and/or investments outside the US.

It requires Foreign Financial Institutions (i.e. those outside of the USA), such as Ulster Bank, to identify and report this information to the US Internal Revenue Service (IRS). Numerous countries around the world have entered into agreements with the US, and passed local legislation to enable and mandate compliance with FATCA.

Find out more about FATCA

To enable the automatic exchange of tax information, the Organisation for Economic Co-operation and Development (OECD) has led the development of a global Common Reporting Standard (CRS). This new agreement requires financial institutions (in participating areas) to identify customers who are tax resident in jurisdictions other than where their account is held.

The financial institutions must also report information about these customers to the relevant authority. For example, if a customer holds an account in England, but is tax resident in France, a report must be filed. To ensure we can comply with this legislation we need to have in place the appropriate policies and processes.

Find out more about CRS

We’ve a legal requirement to identify customers’ tax residencies and tax statuses. This is because local tax authorities have signed international agreements to share information for tax reasons.

A Taxpayer Identification Number (TIN) is a generic term for the unique reference held for an individual or entity by Tax authorities. For example this might be your National Insurance number or Social Security Number for individuals. For entities, this might be your Employer Identification Number, Unique Business Reference or Corporation Tax Number. Other examples can be found via Tax identification numbers (TINs) webpage.

If the Bank has contacted you by letter you will need to complete the tax status declaration (TSD) form. The letter will also set out what information is required from you.

If you agree with the information outlined in the letter you are only required to return the completed form to confirm this as being correct.

If the information isn’t correct you will need to provide evidence of where you are a tax resident or a citizen, guidance on what documentation is required can be found via Identifications and Residency document (pdf).

A Passive NFFE/NFE are those whose income is at least 50% derived from passive income, for example, dividends, interest, rents and patent royalties (copyrights) and whose assets are mainly assets that generate such income.

An Active NFFE/NFE includes most trading entities such as: Building Companies, Retail Companies and Services Companies.

The NFFE/NFE also meets the following:
Religious, charitable, scientific, artistic, cultural, athletic, educational purposes, or is a professional organisation, business league, chamber of commerce, labour organisation, agricultural or horticultural organisation. It is also a civic league or an organisation operated exclusively for the promotion of social welfare.

Sponsored NFFE/NFE’s are those already registered with the internal revenue service.