With Act XIX of 2014, the Agreement on the implementation of the regulation of the Foreign Account Tax Compliance Act and the advancement of international tax compliance between the Government of Hungary and the Government of the United States has been published. The primary goal of the regulation is to monitor the foreign investments of American citizens / American residents abroad.
In the interest of this effort, our Bank has to perform an investigation with regard to the determination of status of our clients in the United States. If, during the investigation, our Bank identifies indications of U.S. status or applicability of the FATCA Act, we will contact the account holder to determine whether the account in question qualifies as a U.S. reportable account pursuant to the FATCA Act (hereinafter: Account to be Reported). If this does not yield results, then, pursuant to the FATCA Act, we must classify the account as an Account to be Reported to the United States and report it accordingly.
Pursuant to §43/B-43/C of Act XXXVII of 2013 regarding certain procedures of the FATCA Act and certain rules of international public administrative cooperation in connection with taxation and other public burdens, the Bank has to report to the National Tax and Customs Administration of Hungary with regard to Accounts to be Reported the account owner’s name, address, United States identifier, account number and balance/value. Pursuant to the FATCA Act, the National Tax and Customs Administration of Hungary forwards the data to the applicable United States agency, the IRS**.
If, during the account opening process, our bank does not identify any indications of U.S. residency or factors falling within the scope of the FATCA Act, the aforementioned reporting obligation does not arise.
*FATCA – Foreign Account Tax Compliance Act
**IRS - Internal Revenue Service