Many multinational corporations (MNCs) whose primary business activities are outside of the traditional financial services industry mistakenly believe FATCA will not impact them. FATCA may impact all MNCs in at least one of the following three ways:
- Additional documentation may need to be collected from certain non-US parties related to payments made as part of the Treasury and Accounts Payable function
- Entities within the MNC's worldwide group may, in fact, meet the definition of a "foreign financial institution" or "non-financial foreign entity" and may be required to take affirmative steps to be compliant under FATCA
- MNCs will need to verify whether their foreign banking or other financial relationships that they have within their global organization are with foreign financial institutions that are FATCA compliant
This document provides a brief overview of FATCA, debunks the common misconception that FATCA only affects entities in the financial services industry, and provides insight into key points that MNCs should start undertaking to comply with FATCA.