FATCA and CRS FAQ

FATCA stands for the Foreign Account Tax Compliance Act. It is a piece of legislation to counter tax evasion in the United States of America (US), introduced by the United States Department of Treasury (Treasury) and the US Internal Revenue Service (IRS). The purpose of FATCA is to encourage tax compliance by preventing US persons* from using banks and other financial organisations to avoid US taxation on their income and assets. 

FATCA's objective is the prevention of tax evasion by identifying US persons* who invest directly in offshore accounts, or indirectly through the ownership of foreign passive income generating entities.

FATCA will require foreign financial institutions (FFIs)* to provide information to the US Internal Revenue Service (IRS) on accounts held by US persons*. In addition, passive non-financial foreign entities (NFFEs)* will be required to provide information on their substantial US* owners to their FFIs where the passive NFFE holds its accounts.

To enforce compliance, a 30% withholding tax will be imposed on certain payments. 

*For any defined terms please see the Table of terms and definitions.

The term 'United States citizen' or 'US citizen' means:

• An individual born in the US; or
• An individual whose parent or parents is/are a US citizen(s); or
• An individual of whom either one or both parents were born in the US; or
• A former alien who has been naturalised as a US citizen; or
• An individual born in Puerto Rico; or
• An individual born in Guam; or
• An individual born in the US Virgin Islands.

The term 'United States person' or 'US person' means:

• A US citizen (including dual citizen).
• A US resident.
• An individual born in the US but resident in another country and who has not given up his or her US citizenship.
• A person residing in the US (resident alien).
• A person who is holding a Green Card or who held one in the previous calendar year.
• Certain persons who are physically present in the US for at least 31 days during the current year 183 days during the three-year period that includes the current year and the two years immediately before that, counting: all the days you were presen in the current year, and 1/3 of the days you were present in the first year before the current year, and 1/6 of the days you were present in the second year before the current year.
• A partnership organised in the US or under the laws of the US or any state thereof.
• A corporation organised in the US or under the laws of the US or any state thereof.
• Any estate where the deceased was a citizen or resident of the US, other than a foreign estate.
• Any trust, if:
  • a court in the US is able to exercise primary supervision over the administration of the trust and
  • one or more US persons* have the authority to control all substantial decisions of the trust.

On a regular basis, banks and other financial institutions will be required to report information on financial accounts held directly or indirectly by US persons*. Nedbank is required to be fully FATCA-compliant in all countries in which the Bank operates.

*For any defined terms please see the Table of terms and definitions.

Every client is affected by FATCA and must provide a Nedbank FATCA and CRS Self-certification form.

FATCA will only result in the reporting of individual and entity clients who meet the definition of a US person* for US* tax purposes. In addition, a non-US entity* (US person*) with one or more controlling persons* that meet the definition of a US person* will also be reported to the US* Internal Revenue Service (IRS). 

The term 'US person' includes, but is not limited to, the following:

• A citizen of the US*, including an individual born in the US*, but resident in another country (who has not given up his/her US citizenship*).
• A person residing in the US*, including US Green Cardholders.
• Certain persons who spend a significant number of days in the US each year.
• US corporations, US partnerships, US estates and US trusts.

For more information visit the IRS website www.irs.gov or contact your professional tax advisor.

*For any defined terms please see the Table of terms and definitions.

FATCA legislation became effective on 1 March 2010.

An intergovernmental agreement* (IGA) provides for a partnership agreement between the US and a FATCA partnership jurisdiction, such as South Africa, as well as other countries such as France, Germany, the United Kingdom, India, and Spain. 

An IGA enables countries to build FATCA compliance into their legal framework so that they can implement FATCA. IGAs also enable foreign financial institutions* (FFIs) in the designated jurisdictions to comply with FATCA, especially where there are privacy laws. There are currently two types of IGAs, Model 1 and Model 2.

A Model 1 agreement allows FFIs in a country to report to their local tax authority who will then provide the information to the US Internal Revenue Service (IRS) through the automatic exchange of the information. Each country's tax authority has a separate Model I agreement with the IRS, which includes country-specific provisions in addition to simplified due diligence and withholding requirements. 

Under a Model 2 agreement, the FFI would report information directly to the IRS. South Africa has signed a Model 1 agreement with the IRS.

*For any defined terms please see the Table of terms and definitions.

Even though the Nedbank Africa Region (NAR) subsidiaries have not signed an IGA with the US*, the subsidiaries are part of the Nedbank Group and therefore they become, what is called, "participating foreign financial institutions* (participating FFIs)".

This means that for Nedbank Group as a whole to remain compliant with FATCA, the NAR subsidiaries must provide all the relevant data required to comply with this legislation because they form part of the "expanded affiliated group"* called Nedbank Group.

*For any defined terms please see the Table of terms and definitions.

Certain categories of foreign financial institutions* (FFIs) and other entities may be exempt from the FATCA legislation.

Those FFIs that are exempt from the FATCA legislation do not have to register with the US* Internal Revenue Service (IRS) and nor do they need to obtain a Global Intermediate Identification Number* (GIIN). These exempted FFIs will also not be required to do any reporting.

However, although exempted from registration and reporting, they may still be required to complete the relevant IRS documentation depending on the circumstances and the type of FFI they are.

The following other types of entities may also be exempt from FATCA legislation:

• Most government entities.
• Most non-profit organisations exempt from taxation.
• Certain small, local financial institutions.
• Certain retirement funds.

*For any defined terms please see the Table of terms and definitions.

The following products will be impacted by FATCA:

• Depository accounts*, such as ordinary cheque accounts, savings accounts, money market accounts and fixed-deposit accounts.
• Endowment policies.
• Voluntary-purchased annuities.
• Other similar voluntary investment products such as units in collective investment schemes or units held in a product provided by a linked-investment service provider.
• Custodial accounts*.

*For any defined terms please see the Table of terms and definitions.

Products not affected by FATCA generally include, but are not limited, to the following:

• Certain retirement funds, i.e., preservation and retirement annuity funds.
• Annuities (except voluntary purchased annuities that are in scope).
• Life insurance policies that are pure risk policies with no cash value.

To comply with the intergovernmental agreement* (IGA), Nedbank, along with all registered financial institutions, must identify and classify their account holders, and report on affected accounts directly or indirectly owned by US persons* as well as passive non-financial [foreign] entities* (passive NFFEs) with controlling US persons*. Nedbank will also need to report on all payments made to non-participating foreign financial institutions*  (non-participating FFIs), as well as non-compliant account holders*. 

For financial institutions in countries that have signed an IGA to comply with FATCA, such as Nedbank, the following steps will have to be taken:

• Conduct a review of new and existing clients to identify those that are reportable under FATCA. entity clients will be classified according to the FATCA legislation (for example, as US persons*, FFIs* or NFFEs*).
• Report information to the local tax authority or to the US* Internal Revenue Service on all accounts held directly or indirectly by US persons*.
• Report information about clients who do not provide the required documentation to Nedbank where that information may indicate that the client has some US 'indicia' (indicators).
• In certain circumstances deduct and withhold a 30% tax on pass through payments paid to account holders* who:
  • do not supply the required information (non-compliant account holders*); or
  • make payments to a non-participating FFIs*.

*For any defined terms please see the Table of terms and definitions.

In general, for a country that has not signed an intergovernmental agreement* with the US*, a withholding agent* is required to withhold 30% on a withholdable payment made to a foreign financial institution* (FFI) or to a non-financial foreign entity* (NFFE), unless the FFI or NFFE meets certain requirements. Withholdable payments under FATCA are payments of interest, dividends, rents, and certain other specified items of income from U.S. sources.

In addition, an FFI* must withhold 30% on any pass-through payment it makes to a non-compliant account holder, as well as on payments it makes to another FFI, unless that FFI meets certain requirements. An example of a pass-through payment is where a dividend is paid by a US company to the account holder via a FFI. 

Even though the Nedbank Africa Region (NAR) subsidiaries have not signed an IGA with the US, the subsidiaries are part of the Nedbank Group and therefore they become, what is called, "participating foreign financial institutions* (participating FFIs)".

The NAR subsidiaries must provide all the relevant data required to comply with the FATCA legislation because they form part of the "expanded affiliated group"* called Nedbank Group.

Furthermore, they are not currently required to withhold on any payments of a US source to account holders, provided they supply the necessary information regarding the account holder to the upstream withholding agent.

*For any defined terms please see the Table of terms and definitions.

A non-compliant account holder* refers to any account holder who:

• Fails to comply with Nedbank’s request for a Nedbank FATCA and CRS Self-certification form to determine if the account holder is a US person*.
• Fails to provide Nedbank with any additional information and documentation that may be required based on the Nedbank FATCA and CRS Self-certification form such as the Tax Identification Number* (TIN), the Global Intermediatory Identification Number (GIIN), and any other IRS form as may be required.
• Fails to comply with Nedbank’s request for a Nedbank FATCA and CRS Individual and Controlling Person Self-certification form for each US controlling person* or owner of a US-owned entity, or a passive non-financial [foreign] entity* (passive NFFE).
• Fails to provide a waiver of any foreign law that would prevent a foreign financial institution (FFI) from reporting the information required under FATCA.

Non-compliant account holders* will be reported as part of the FATCA reporting to the US Internal Revenue Service* (IRS).

*For any defined terms please see the Table of terms and definitions.

FATCA generally applies to two defined payment types, namely:

• Withholdable payments.
• Pass-through payments.

Withholdable payments under FATCA are payments of interest, dividends, rents, and certain other specified items of income from US sources.

Pass-through payments under FATCA are certain payments that would originate from a debtor payment, which passes through a foreign financial institution* (FFI) to a non-compliant account holder* at such FFI that are "attributable to" withholdable payments that would be subject to withholding under FATCA.

An example of a pass-through payment is where a dividend is paid by a US company to the account holder* via a FFI.

In addition, an FFI must withhold 30% on any pass-through payment it makes to a non-compliant account holder, as well as on payments it makes to another FFI, unless that FFI meets certain requirements.

*For any defined terms please see the Table of terms and definitions.

A withholdable payment is a payment of:

• A US* source of income that is fixed or determinable, such as dividends or interest, and which is annual or periodical income; or
• Deposit interest paid by foreign branches of US banks. 

*For any defined terms please see the Table of terms and definitions.

The following links* provide access to IRS W-forms*:

• For W-8BEN form - https://www.irs.gov/pub/irs-pdf/fw8ben.pdf
• For W-8BEN-E form - https://www.irs.gov/pub/irs-pdf/fw8bene.pdf
• For W-8ECI form - https://www.irs.gov/pub/irs-pdf/fw8eci.pdf
• For W-9 forms - https://www.irs.gov/pub/irs-pdf/fw9.pdf

* If you do not want to click on a link, please type the address in your browser.

*For any defined terms please see the Table of terms and definitions.

A former United States (US) citizen must provide a Certificate of Loss of Nationality (CLN) to prove they are no longer a US person or select a reason as to why they do not have a CLN. This is a specific requirement both under the FATCA legislations and a provision that has been adopted into the FATCA intergovernmental agreements.

Renouncing US citizenship is a complete renunciation of all the rights and privileges of US citizenship. It is also an irrevocable action and cannot be cancelled or appealed under most circumstances.

The Certificate of Loss of Nationality of the United States (CLN) is form DS-4083 of the Bureau of Consular Affairs of the United States Department of State. This form must be completed by a consular official of the United States documenting relinquishment of United States nationality.

This process may take several months to complete and is a costly process.

*For any defined terms please see the Table of terms and definitions.

'CRS' is the abbreviation for the ‘Common Reporting Standard’. The CRS is an initiative by the Organisation of Economic Co-Operation and Development* (OECD) that encourages the exchange of information on a global scale between revenue authorities. This initiative seeks to identify clients who appear to have tax obligations, tax liabilities or tax residencies outside the country of onboarding.

Ultimately Common Reporting Standard (CRS) was designed with the intention to help fight against tax evasion and protect the integrity of tax systems.

*For any defined terms please see the Table of terms and definitions.

Automatic Exchange of Information (AEOI) is the exchange of information between countries without having to request it. It involves the systematic and periodic transmission of "bulk" taxpayer information between countries that have signed up to the AEOI.

AEOI exists to reduce global tax evasion.

CRS is the global equivalent of FATCA and therefore does not replace FATCA but works with FATCA to combat tax evasion and achieve global tax transparency. The CRS seeks to establish the tax residency of clients and identify jurisdictions in which the client has tax obligations. While FATCA requires tax reporting on US persons* only.

*For any defined terms please see the Table of terms and definitions.

Under the Common Reporting Standard (CRS), financial institutions* (FI) are required to identify clients, being individuals or entities, who appear to either have tax obligations, tax liabilities or tax residencies outside the country of onboarding where they hold their accounts and products. An entity such as a partnership, limited liability partnership or similar legal arrangement that has no tax residence, shall be treated as tax resident in the jurisdiction in which its place of effective management* is situated.

Financial institutions* (FI) then report certain information to the relevant tax authority. The relevant tax authority may then share that information with the tax authority(ies) where the account holder* has tax obligations, tax liabilities or tax residencies.

*For any defined terms please see the Table of terms and definitions.

Under the Common Reporting Standard (CRS), tax authorities require financial institutions* (FI) such as Nedbank to collect and report certain information relating to their client’s foreign tax obligation, tax liabilities or tax residencies. If you open a new bank account, invest in new financial products, or change your circumstances in some way, we will ask you to certify a number of details about yourself. This process is called ‘self-certification’ and we are required to collect this information under CRS.

It is important to remember that, although it is your responsibility to prove whether or not you have tax obligations, tax liabilities or tax residencies outside the country of onboarding; Nedbank is legislated to apply background reasonability tests to the self-certification that you have provided.

*For any defined terms please see the Table of terms and definitions.

Tax obligations mean that you have current tax expenses. An example of a tax obligation would be that you must pay tax on your salary as and when the salary is earned.

Tax liabilities mean that you may have a future tax expense that could result in your having to pay more money to the revenue authority than what you have anticipated. An example of a tax liability is when you earn rental income and must pay tax on that rental income to the revenue authority in future.

Tax residencies look at whether you have been a resident of or have been physically present in a country for a certain amount of time, but the meaning of tax residency can differ from one country to the next. For individuals, physical presence in a country or jurisdiction is the main test for tax residency. Some countries also determine the tax residency of individuals by looking at factors like homeownership if you have long-term rented accommodation or if you have certain financial interests in that country.

Your tax residency looks at whether you have been a resident of or have been physically present in a country for a certain amount of time, but the meaning of tax residency can differ from one country to the next. For individuals, physical presence in a country or jurisdiction is the main test for tax residency. Some countries also determine the tax residency of individuals by looking at factors like homeownership, if you have long-term rented accommodation, or if you have certain financial interests in that country.

Nedbank will try to assist you as much as possible, however, we are not able to provide tax advice. For this you may wish to consult an independent tax advisor as Nedbank employees are not tax advisors.

For more information, please visit the Organisation of Economic Co-Operation and Development* (OECD) website at https://www.oecd.org on how to determine your tax residency.

*For any defined terms please see the Table of terms and definitions.

Under the Common Reporting Standard (CRS), Nedbank is legally required to establish whether any our clients, have tax obligations, tax liabilities or tax residency outside the country of onboarding, or not.  

Even if you live in the same country/jurisdiction as where you pay tax, Nedbank is required by law to confirm whether, or not, you have tax obligations, tax liabilities or tax residency outside the country of onboarding

No. What needs to be reported to the local tax authorities is determined by law

Nedbank is legally required to establish whether any of our clients, have tax obligations, tax liabilities or tax residency outside the country of onboarding, or not. 

Nedbank will only provide tax authorities with your tax details where you have confirmed that you have tax obligations, tax liabilities or tax residency outside the country of onboarding.

To self-certify is to confirm in writing, through the completion, dating and signing of a Nedbank FATCA and CRS Individual and Controlling Person Self-certification form, whether or not, you as the account holder, are either a US person*, and/or have tax obligations, tax liabilities or tax residencies outside the country of onboarding.

You may also be required to complete an IRS W-form in certain circumstances.

*For any defined terms please see the Table of terms and definitions.

Yes. Nedbank will provide you with the FATCA and CRS Self-certification form(s) and where required, an applicable IRS W-form. The IRS W-forms* can also be downloaded from the Nedbank website for completion and submission.

*For any defined terms please see the Table of terms and definitions.

Both the Foreign Account Tax Compliance Act (FATCA) and Common Reporting Standard (CRS) provide that Nedbank must obtain a valid Nedbank FATCA and CRS Self-certification form at account opening, or where there is a change in circumstances, that allows Nedbank to determine whether you are a US Person* or have tax obligations, tax liabilities or tax residencies outside the  country of onboarding.

For the Nedbank FATCA and CRS Self-certification form to be valid it must be signed (or otherwise positively affirmed, i.e., involving some level of active input or confirmation) by the account holder*.

It MUST be dated, and must include the following information relating to the account holder:

• Name of the account holder.
• Identification number of the account holder.
• Physical address of the account holder.
• Postal address of the account holder.
• Date of birth of the account holder.
• Country of birth of the account holder.
• Place of birth of the account holder, if outside the country of onboarding.
• Answers to Nedbank’s two FATCA and CRS questions:
  • Do you hold US citizenship, or are you a US person* or a US national, and/or
  • Do you have tax obligations, tax liabilities or tax residencies outside the country of onboarding?
• Country(ies) of tax residence.
• Tax Identification Number (TIN)* for each country(ies) of tax residence OR reasons for not providing TIN(s) [predetermined reasons].

*For any defined terms please see the Table of terms and definitions.

For account holders* who are entities:

• The Nedbank FATCA and CRS Entity Self-certification form must be signed and dated by an authorised representative or officer of the account holder when opening the account at Nedbank.
• An authorised representative must have the legal capacity to sign for the entity that is the actual owner of the income.

No. Completed and signed self-certification forms that are scanned and attached to an email sent to Nedbank will be accepted.

Both Foreign Account Tax Compliance Act (FATCA) and Common Reporting Standard (CRS) provide that Nedbank must obtain a valid Nedbank FATCA and CRS Self-certification form at account opening, or where there is a change in circumstances, that allows Nedbank to determine whether the entity is incorporated or organised, or has a place of effective management* outside the country of onboarding, and/or has tax obligations, tax liabilities or tax residencies outside the country of onboarding.

For the Nedbank FATCA and CRS Entity Self-certification to be valid it must be signed (or otherwise positively affirmed, i.e., involving some level of active input or confirmation) by a person authorised to sign on behalf of the entity.

It MUST be dated, and must include the following information relating to the account holder*:

• Name of entity.
• Registration number of entity, where applicable. (It is noted that not all entities have registration numbers.)
• Place of effective management. (When asked to provide the ‘place of effective management’ it is important to indicate the country, and not a city / town or suburb.)
• Physical address of entity. (According to the CRS commentaries they refer to the address where the entity is incorporated or organised.)
• Postal address of the account holder.
• Nedbank’s four entity questions:
  • Is the entity incorporated or organised or has a place of effective management* outside the country of onboarding?
  • Does the entity have tax obligations, tax liabilities or tax residencies outside the country of onboarding?
  • Do any of the controlling persons* of the entity:
    • hold US citizenship, or are they a US person* or a US national? and/or
    • have tax obligations, tax liabilities or tax residencies outside the country of onboarding?
  •  Is the entity a financial institution*?
• Tax Identification Numbers (TIN(s)* for each country(ies) of tax residence OR reasons for not providing TIN(s) [predetermined reasons].
• Entity classification type. (Includes stock exchange name, GIIN number OR reasons for not providing GIIN*, depending on the type of the entity classification.)

*For any defined terms please see the Table of terms and definitions.

For account holders* who are entities:

• The Nedbank FATCA and CRS Entity Self-certification form must be signed and dated by an authorised representative or officer of the account holder when opening the account at Nedbank.
• An authorised representative must have the legal capacity to sign for the entity that is the actual owner of the income.

No. Completed and signed self-certification forms that are scanned and attached to an email sent to Nedbank will be accepted.

Even if you have already provided information under Foreign Account Tax Compliance Act (FATCA), you may still need to provide additional information that is required under Common Reporting Standard (CRS) as each of these are different pieces of legislation with different requirements.

This is why Nedbank requires the Nedbank FATCA and CRS self-certification form.

Clients should provide the Nedbank FATCA and CRS Self-certification forms(s), and any applicable IRS W-form*, to the banker in the branch or the respective relationship manager, or the forms can be emailed to the contact centre.

No. If you are an individual and your account indicates any of the below, Nedbank may request further information/documentation to determine whether you are deemed to be a US person* under FATCA:

• US citizenship or US residence.
• US place of birth.
• US address, including US postal boxes.
• US telephone number.
• Repeating payment instructions to pay amounts to a US address or an account maintained in the US.
• Current power of attorney or signatory authority granted to a person with a US address.
• In-care-of* or hold-mail address, which is the sole address for the account holder*.

*For any defined terms please see the Table of terms and definitions.

If you are deemed a US person*, you may be requested to supply Nedbank with additional information or documentation. You can visit the US Internal Revenue Service* (IRS) website www.irs.gov to obtain additional information.

If you are deemed a US person*, Nedbank will be required to report information about you and your account to the local tax authority or the IRS on an annual basis.

It is important to remember that, although the responsibility to prove your tax status rests with you, the account holder; Nedbank must apply a reasonability test on the Nedbank FATCA and CRS Individual and Controlling Person Self-certification form. This may result in you being reported to the local tax authority or the IRS if the answers to the FATCA questions do not correspond to your “Know your client” (KYC)* information.

*For any defined terms please see the Table of terms and definitions.

If you are not a US person* as defined then FATCA will have a minimal impact on you. 

Nedbank will, however, still need you to complete a Nedbank FATCA and CRS Individual and Controlling Person Self-certification form.

Nedbank may also have to request additional documentation if we have reason to believe that your circumstances have changed.

*For any defined terms please see the Table of terms and definitions.

Note: where the word [foreign] is included in any terminology, this terminology would refer to a definition found under FATCA.

FATCA does not replace the existing US tax regimes. It may, however, add additional requirements and complexity to the existing tax rules you may already follow. We recommend that you contact a professional tax advisor to discuss your personal tax situation.

Nedbank will report the required information to the IRS* and to the relevant tax authorities to comply with the Foreign Account Tax Compliance Act (FATCA) and Common Reporting Standard (CRS) reporting standards for all accounts held by US persons*, or account holders* that have tax obligations, tax liabilities or tax residencies outside the country of onboarding.

This information will be the same information provided by you in the Nedbank FATCA and CRS Individual and Controlling Person Self-certification form:

• Your name.
• Your address.
• Your identification number.
• Your account number.
• Each country of tax residence that you have tax obligations in.
• Every taxpayer identification number* (TIN) that you have provided, or the reason why you do not have a TIN.
• The aggregated year-end balance for all your accounts.
• The gross proceeds on any disposal, income flows, gross withdrawals, or payments from your stockbroking and/or unit trust accounts.
• All payments made to your accounts, where you have failed to become FATCA compliant.

#When your country adopts the automatic exchange of information under CRS.

*For any defined terms please see the Table of terms and definitions.

The term 'TIN' means taxpayer identification number*. A TIN is a unique combination of letters or numbers assigned by a jurisdiction to an individual or an entity to identify the individual or entity for the purposes of administering the tax laws of such jurisdiction.

In some jurisdictions TINs are not issued. In such cases, instead of the TIN, a functional equivalent can be used, such as a high-integrity number with an equivalent level of identification. Examples of that type of number include, for entities, a business/company registration code/number.

Please note:

• In the US for individuals, their TIN would be referred to as their Social Security Number
• For a US entity* (US person*), it’s TIN is referred to as their Employer Identification Number.
• In the UK for individuals their TIN would either be tax number, OR their National Insurance Number is also used as a TIN.

Even though you have no connections to the US, or have no foreign tax obligations, you will still need to confirm whether or not, you are a US Person* and/or have tax obligations, tax liabilities or tax residencies outside of your country of onboarding.  

Nedbank will request you to provide us with a Nedbank FATCA and CRS Individual and Controlling Person Self-certification form.

Nedbank may also have to request additional documentation if we have reason to believe that your circumstances have changed.

*For any defined terms please see the Table of terms and definitions.

Yes, your account will be subject to the rules of FATCA due to the definition of what a US Person* is.

*For any defined terms please see the Table of terms and definitions.

A joint account that has one US owner is treated as a US account and the entire account is subject to the FATCA legislation. For example, if an account with a balance of $500 000 is held by a local citizen and a US person*, Nedbank will report the US person* and the entire account balance of $500 000 to the IRS and *.

*For any defined terms please see the Table of terms and definitions.

If an account is regarded as an equally held joint account, such as a joint bond, each person is regarded as a controlling person* of that account.

Where an account is jointly held the balance or value in the account will be attributed in full to each controlling person of the joint account should that those persons be Foreign Account Tax Compliance Act (FATCA) or Common Reporting Standard (CRS) reportable.

Where one of the controlling persons of this joint account is a US person*, or has tax obligations, tax liabilities, or tax residencies outside the country of onboarding (reportable person), the full balance of the joint account will be reported under the name of the reportable person* to the relevant tax authority.

If an account is jointly held by an individual and an entity, the financial institution* (FI) that maintains the account will need to apply the due diligence requirements separately to both the individual and the entity in relation to that account. The FI would need to identify the controlling person of the entity that is the joint account holder*.

*For any defined terms please see the Table of terms and definitions.

If a person has a general power of attorney over an account, and that person is either a US person*, and/or has tax obligations, tax liabilities or tax residencies outside the country of onboarding (reportable person); and both the account holder* and the person with said power of attorney, transact on the account, then the full balance of the account will be reported under the name of the general power of attorney holder to his/her relevant tax authority. [Please note that the account holder does not have any indicia (indicators)].

A reportable person* is any person that is a US person*, or has tax obligations, tax liabilities or tax residencies outside the country of onboarding.

*For any defined terms please see the Table of terms and definitions.

The FATCA intergovernmental agreement* (IGA) and the CRS legislation do not differentiate between individual account holders based on their status. Thus, diplomats or asylum seekers or refugees and other individuals must be treated in the same way as any other individual under FATCA and CRS.

The fact that an asylum seeker or refugee has a valid permit or identity number issued by the country of onboarding, it is not an indication that that person is necessarily tax resident in the country that issued the permit. He/she may still have tax obligations or tax liabilities or tax residencies outside the country of onboarding.

It is important that all diplomats, asylum seekers and refugees understand that client information is protected by a strict code of secrecy and security which all members of the Nedbank Group, their staff and third parties are subject to. This includes the use, retention, disposal, safeguarding and disclosure of personal information to third parties.

Furthermore, all data transmitted to the relevant tax authority is encrypted.

*For any defined terms please see the Table of terms and definitions.

The term 'entity'* for the purposes of the Foreign Account Tax Compliance Act  FATCA) and Common Reporting Standard (CRS) means any person other than a natural person.

Included in the definition of 'entity' in the FATCA intergovernmental agreement* and the CRS legislation, is any legal person or a legal arrangement such as a trust, partnership, or association.

For these purposes’ ‘entity' includes, but is not limited to, the following juristic persons:

• A private company, being a (Pty) Ltd company.
• A public company, being a Ltd company (this company type could be listed or unlisted).
• A state-owned company (SOC) Ltd.
• An external or foreign company.
• A personal-liability company (Inc).
• A non-profit company (NPC).
• A close corporation (CC).
• A partnership.
• A trust.
• An association. A stokvel.

For persons other than individuals a US person* includes, amongst others, a company, corporation, trust, or association incorporated/organised in the US* or governed under the laws of the US.

*For any defined terms please see the Table of terms and definitions.

All new entity clients are required, as part of the account opening procedures, to complete a Nedbank FATCA and CRS Nedbank Entity Self-certification form.

Existing entities may be asked to provide a Nedbank FATCA and CRS Entity Self-certification form if a client’s account information has a change in circumstances or contains certain indicia (indicators).  

For entity clients the indicia (indicators) usually includes:

• Place of incorporation outside the country of onboarding.
• Place of effective management* outside the country of onboarding.
• Current physical address outside the country of onboarding.
• Current postal address outside the country of onboarding.
• Indication that the controlling persons* maybe tax resident in the US* or in a jurisdiction outside the country of onboarding, in relation to certain entity types for example:
  • Passive non-financial [foreign] entities* (passive NFEs).
  • Trustee documented trusts.
  • Investment entities* that are resident in a non-participating jurisdiction* and are managed by another financial institution in a participating jurisdiction.

Having these indicia (indicators) does not mean that the entity is either FATCA or CRS reportable, only that the client needs closer scrutiny, so Nedbank may request additional information.

*For any defined terms please see the Table of terms and definitions.

No. The impact of FATCA is wider than just US entity* (US person*). FATCA also affects financial institutions* globally as well as certain non-US businesses with US controlling persons*.

If your entity is a financial institution with a bank account at Nedbank, you will need to identify the entity’s financial institution classification type and provide a Global Intermediate Identification number* (GIIN), or a reason why you cannot provide a GIIN.

If the entity has US controlling persons and the entity classification type is one of the following:

• Passive non-financial entities* (passive NFEs).
• Trustee documented trusts*.
•  Investment entities* that are resident in a non-participating jurisdiction and are managed by another financial institution in a participating jurisdiction. then the entity will be FATCA impacted.

*For any defined terms please see the Table of terms and definitions.

The classification of an entity* under the Foreign Account Tax Compliance Act (FATCA) and Common Reporting Standard (CRS) is very important because it will determine whether information relating to the entity’s controlling person(s) needs to be collected and disclosed to the relevant tax authorities. 

An example of this is if the entity has either US controlling persons, and/or controlling persons that have tax obligations, tax liabilities or tax residencies outside the county of onboarding, AND the entity classification type is one of the following:

• Passive non-financial [foreign] entities* (passive NFEs )
• Trustee documented trusts* or
• Investment entities* that are resident in a non-participating jurisdiction and are managed by another financial institution in a participating jurisdiction then the entity will be FATCA and/or CRS impacted.

*For any defined terms please see the Table of terms and definitions.

Where possible, Nedbank will endeavour to provide guidance on your FATCA and CRS entity classification type based on the entity’s legal type, however, for more detailed advice you would need to seek tax advice from your local tax authority or your tax practitioner.

A controlling person(s)* is/are the natural person(s) who exercise(s) control over an entity*. Where the entity is treated as a passive non-financial [foreign] entity* (passive NFE), a financial institution* must determine whether or not the controlling person(s)* is/are a reportable person(s)*.

All beneficial owners are controlling persons, but not all controlling persons are beneficial owners, because the Financial Intelligence Centre Amendment Act (FICA)* South Africa does not regard a trust, or partnership, or association as a legal person.

A controlling ownership interest depends on the ownership structure of the company. It may be based on a threshold, e.g., any person owning more than a certain percentage of the company (e.g., 20% for Namibia and Zimbabwe, 25% for Eswatini and Lesotho), or on who exercises ultimate effective control over the entity.

Under FATCA, in the case of a trust the controlling person(s) may be the settlor(s), trustee(s), protector(s) (if any), beneficiary/beneficiaries or class(es) of beneficiaries, or any other natural person(s) exercising ultimate effective control over the trust (including through a chain of control or ownership). Under the CRS the settlor(s), trustee(s), protector(s) (if any), and the beneficiary/beneficiaries or class(es) of beneficiaries is/are always treated as a controlling person(s) of a trust, regardless of whether or not he/she/they exercise(s) control over the activities of the trust.

Where the settlor(s) of a trust is/are an entity/entities, financial institutions must also identify the controlling person(s) of the settlor(s) and, when required, report such controlling person(s) as a controlling person(s) of the trust. In the case of a legal arrangement other than a trust, such term means a person(s) in an equivalent or similar position(s).

In the case of a partnership, information must be obtained for the following controlling persons:

• Every partner, including every member of a partnership en commandite, being a partnership whose partners’ names are not disclosed.
• The person who exercises executive control over the partnership.
• Each natural person who purports to be authorised to establish a business relationship or who can enter into a transaction with the accountable institution on behalf of the partnership.

The following are deemed to be controlling persons: 

1. For a company

• Each natural person who directly owns the required % as per local legislation, e.g., 20% for Namibia, 20% for Zimbabwe, 25% for Eswatini and Lesotho of the company's shares.
• Where the company's shares are owned directly by an entity each natural person who is the ultimate beneficial holder and indirectly owns the required % as per local legislation e.g., 20% for Namibia and Zimbabwe, 25% for Eswatini and Lesotho of the company's shares.
• Each natural person who exercises control (the ability to influence materially the outcome of a vote at a general meeting or appointor veto the appointment of the directors of the entity) through other means such as personal connections or contractual relationships.
• If, despite reasonable effort, the information required in the above bullet points cannot be obtained, then each natural person who holds a senior management position and exercises executive control over the daily or regular affairs of the company, filling the position of chief executive officer, chairman of the board, chief financial officer, chief operating officer or similar positions.

2. For a trust

• Settlor
• Founder
• Donor
• Trustee
• Beneficiary/Beneficiaries

3. For a partnership of entities

• Each natural person who is the ultimate beneficial holder of more than the required % as per local legislation e.g., 20% for Namibia and Zimbabwe, 25% for Eswatini and Lesotho of the partnership interest.
• Each natural person who exercises control through other means such as personal connections or contractual relationships.
• Each natural person who controls the business decisions of the partnership, in terms of the partnership agreement.

4. For a partnership of natural persons

• All partners of the partnership.

5. For a social club, stokvel or and associations

• All natural persons authorised to manage the affairs of the social club, stokvel or association in terms of the constitution.

6. For a cooperative

• The managing/executive director or person(s) in a similar capacity.

7. For a close corporation

• All members of the close corporation.

Note: The term “controlling person” is relevant when applying due diligence and reporting procedures only to passive non-financial [foreign] entities/non-financial entities.

*For any defined terms pl ease see the Table of terms and definitions.

'Control'* over an entity* is generally exercised by the natural person(s) who ultimately has/have a controlling ownership interest in the entity.

A 'controlling ownership interest' depends on the ownership structure of the legal person and is usually identified based on a threshold by applying a risk-based approach [e.g., any person(s) owning more than a certain percentage of the legal person, e.g., 20% for Namibia and Zimbabwe, 25% for Eswatini and Lesotho.]

Where no natural person(s) exercise(s) control through ownership interests, the controlling person(s)* of the entity will be the natural person(s) who exercise(s) control over the entity through other means such as a majority of a voting right or the right to appoint or remove the majority of the board of the directors.

Where no natural person(s) is/are identified as exercising control over the entity through ownership interests, the reportable person will be deemed to be the natural person holding the position of senior managing official.

*For any defined terms please see the Table of terms and definitions.

The definition of a 'foreign financial institution' (FFI) is very broad and is expected to encompass a number of entities, generally not always considered to be financial institutions. The term 'foreign financial institution' means:

• A custodial institution*, for example a bank/broker holding securities for a client.
• A depository institution*, for example a bank or mutual bank.
• A specified insurance company, for example a long-term issuer that issues cash value retirement, annuity, or endowment policies.
• An investment entity*, for example an asset manager, a collective investment scheme or hedge fund.

'Investment entity' includes two types of entities:

1. An entity* that primarily conducts itself as a business, performing one or more of the following activities or operations for or on behalf of a client:

• trading in money market instruments for example cheques, bills, certificates of deposit and derivatives, foreign exchange, exchange, interest rate and index instruments, transferable securities, or commodity futures;
• individual and collective portfolio management; or
• investing, administering, or managing financial assets or money on behalf of other persons.

These activities or operations do not include rendering non-binding investment advice to a client.

2. The second type of investment entity (an investment entity managed by another financial institution) is any entity whose gross income is primarily attributable to investing, reinvesting, or trading in financial assets, and where the entity is managed by another entity that is a depository institution, a custodial institution, a specified insurance company or the type of investment entity described in (1) above.

Generally non-US entities such as banks, broker/dealers, insurance companies, hedge funds, securitisation vehicles and private equity funds will be considered FFIs.

*For any defined terms please see the Table of terms and definitions.

An entity is 'managed by' another entity if the managing entity performs, either directly or through another service provider on behalf of the managed entity, any of the activities or operations described in the definition of 'investment entity'* under the first type of entity*.

An entity manages another entity only if it has discretionary authority to manage the other entity's assets (either in whole or part).

Where this managed entity is located in a non-participating jurisdiction* and managed by another financial institution, it is treated as passive non-financial [foreign] entity (passive NFE)*.

*For any defined terms please see the Table of terms and definitions.

A foreign financial institution* (FFI) that enters into an FFI agreement* with the US Internal Revenue Service* (IRS) is referred to as a 'participating foreign financial institution'*. An FFI that does not enter into an agreement with the IRS is referred to as a 'non-participating foreign financial institution’ and is subject to withholding under FATCA.

*For any defined terms please see the Table of terms and definitions.

The Global Intermediary Identification Number* (GIIN) is a number issued by the US Internal Revenue Service* (IRS) via the IRS registration portal.

All participating foreign financial institutions* need to register with the IRS to obtain a GIIN.

It applies to financial institutions that have adopted FATCA either through an intergovernmental agreement* or as a choice, being a Model 2 foreign financial institution*.

Certain deemed-compliant or non-reporting financial institutions must also obtain a GIIN.

The GIIN is a unique reference number that has a specific format and is issued to identify each financial institution. Each part of the number has a particular meaning. For example, it tells you whether the financial institution is part of a bigger group or whether the financial institution is a sponsoring entity. It also identifies the financial institution jurisdiction of residence in which it maintains a branch that is not treated as a 'limited' branch.

*For any defined terms please see the Table of terms and definitions.

Under the Foreign Account Tax Compliance Act (FATCA) a [foreign] entity* that is not a financial institution* is a non-financial [foreign] entity* (NFFE), and under Common Reporting Standard (CRS) an entity that is not a financial institution* is a non-financial entity (NFE).

There are two types of NFEs:

• Active non-financial [foreign] entities* (active NFEs) and
• Passive non-financial [foreign] entities* (passive NFEs)

An NFE that conducts an active trade (active NFE) and earns income mainly from business activities is an active NFE.

While an NFE that earns income only from investment income, such as dividends, interest, annuities, rental income, or royalties is a passive [foreign] NFE.

If your entity is classified as a passive [foreign] NFE, you have to certify whether or not any of your controlling persons are either US persons* and/or have tax obligations, tax liabilities or tax residencies outside the country of onboarding.

NFEs include, but are not limited to, the following:

• Listed or privately held operating or trading businesses.
• Professional service firms.
• Certain entities with passive income (i.e., not an operating/trading business).
• Charitable organisations.

*For any defined terms please see the Table of terms and definitions.

An active non-financial [foreign] entity* (NFFE) is a category of NFE that only needs to certify that it is an NFE. It doesn't need to report on any substantial US owners, or US persons* with foreign tax obligations, it may have, and there will not be any withholding on such an entity.

Any non-financial entity can be an active non-financial entity such as:

• Active non-financial entities by reason of income and assets;
• Publicly traded non-financial entities;
• Governmental entities, international organisations, central banks, or their wholly owned entities;
• Holding non-financial entities that are members of a non-financial group;
• Start-up non-financial entities;
• Non-financial entities that are liquidating or emerging from bankruptcy;
• Treasury centres that are members of a non-financial group; or
• Non-profit non-financial entities.

An entity will be classified as an active non-financial entity if it meets any of the following criteria:

• Less than 50% of the non-financial entity's gross income for the preceding calendar year or other appropriate reporting period is passive income and less than 50% of the assets held by the non-financial entity during the preceding calendar year or other appropriate reporting period are assets that produce or are held for the production of passive income. 
• The stock of the non-financial entity is regularly traded on an established securities market or the non-financial entity is a related entity of an entity of which the stock is regularly traded on an established securities market.
• The non-financial entity is a governmental entity, an international organisation, a central bank, or an entity that is wholly owned by one or more of the foregoing.
• Substantially all of the activities of the non-financial entity consist of holding (in whole or in part) the outstanding stock of, or providing financing and services to, one or more subsidiaries that engage in trades or businesses other than the business of a financial institution, except that an entity does not qualify for this status if the entity functions as (or holds itself out to be) an investment fund, such as a private equity fund, venture capital fund, leveraged buyout fund or any investment vehicle whose purpose is to acquire or fund companies and then hold interests in those companies as capital assets for investment purposes.
• The non-financial entity is not yet operating a business and has no prior operating history, but is investing capital into assets with the intent to operate a business other than that of a financial institution, provided that the non-financial entity does not qualify for this exception after a date that is 24 months after a date of the initial organisation of the non-financial entity.
• The non-financial entity was not a financial institution in the past five years and is in the process of liquidating its assets or is reorganising with the intent to continue or recommence operations in a business other than that of a financial institution.
• The non-financial entity primarily engages in financing and hedging transactions with, or for, related entities that are not financial institutions, and does not provide financing or hedging services to any entity that is not a related entity, provided that the group of any such related entities is primarily engaged in a business other than that of a financial institution.
• The non-financial entity meets all the following requirements:
  • it is established and operated in its jurisdiction of residence exclusively for religious, charitable, scientific, artistic, cultural, athletic, or educational purposes; or it is established and operated in its jurisdiction of residence and it is a professional organisation, business league, chamber of commerce, labour organisation, agricultural or horticultural organisation, civic league or an organisation operated exclusively for the promotion of social welfare;
  • it is exempt from income tax in its jurisdiction of residence;
  • it has no shareholders or members who have a proprietary or beneficial interest in its income or assets;
  • the applicable laws of the non-financial entity jurisdiction of residence or the non-financial entity's formation documents do not permit any income or assets of the non-financial entity to be distributed to, or applied for the benefit of, a private person or non-charitable entity other than pursuant to the conduct of the non-financial entity's charitable activities, or as payment of reasonable compensation for services rendered, or as payment representing the fair market value of the property the non-financial entity has purchased; and
  • the applicable laws of the non-financial entity's jurisdiction of residence or the non-financial entity's formation documents require that, on the non-financial entity's liquidation or dissolution, all its assets be distributed to a governmental entity or other non-profit organisation, or escheat to the government of the non-financial entity's jurisdiction of residence or any political subdivision thereof.

Examples of active non-financial entities are manufacturing companies, law firms, mining companies, estate agents, architect firms and farms.

A passive non-financial [foreign] entity* (passive NFE) is a non-financial entity of which 50% of its income is passive, and more than 50% of its assets for the last financial year are in the form of passive investments.

(Passive income is derived from investing in assets rather than from activities carried on in the normal course of a trade or business.)

A passive non-financial entity* is:

• Any non-financial entity that is not an active non-financial entity.
• An investment entity* that is resident in a non-participating jurisdiction* and is managed by a financial institution in a participating jurisdiction*.

Examples of passive non-financial entities are family trusts, investment clubs, non-profit entities that are registered not for gain, and entities that own a farm and its only income is rental income, not farming income.

However, if this passive NFE is an entity and is part of a group that is listed and frequently traded on a regulated stock exchange, then it will default to an active non-financial entity.

*For any defined terms please see the Table of terms and definitions.

As the term suggests, passive income is derived from investing in assets rather than from activities carried on in the normal course of a trade or business.

Passive income includes the portion of income that consists of:

• Dividends.
• Interest.
• Income equivalent to interest.
• Rental income and royalties, other than rental income and royalties derived in the active conduct of a trade or business conducted, at least in part, by employees of the non-financial entity (NFE)*
• Annuities.
• The excess of gains over losses from the sale or exchange of property that gives rise to passive income described previously.
• The excess of gains over losses from transactions (including futures, forwards, options, and similar transactions) in any Financial Assets.
• The excess of foreign currency gains over foreign currency losses.
• Net income from swaps.
• Amounts received under Cash Value Insurance Contracts.

The context in which the income described above is received is important. For example, where the NFE is a dealer in financial assets any such income as described above may be income from a trading activity. Where the income described above is received by a NFE and is accounted for, or is taxable, as income from trading activities, it should be included in gross income and not as passive income. 

Passive income does not include:

• Any commodity hedging transaction;
• Active business gains or losses from the sale of commodities;
• The excess of foreign currency gains over foreign currency losses;
• Net income from notional principal contracts;
• Amounts received under a cash value insurance contract; or
• Amounts received by insurance companies in connection with its reserves for insurance and annuity contracts*.

*For any defined terms please see the Table of terms and definitions.

FATCA and CRS do not replace the existing US or other countries’ tax regimes. It may, however, add additional requirements and complexity to the existing tax rules you may already follow. Should you need further advice on whether or not you have foreign tax obligations, or on your FATCA and CRS entity classification type, you should contact a professional tax advisor.

FATCA and CRS compliance is an ongoing process.

For new account holders FATCA and CRS information must be obtained when Nedbank opens your entity* account; along with a signed certification as to whether or not your entity is a US* entity (US person*) and/or has tax obligations, tax liabilities or tax residencies outside the country of onboarding (foreign tax obligations).

If you are an existing client who became a client before the FATCA or CRS effective dates, your certification as to whether or not your entity has foreign tax obligations will be requested, in the form of the Nedbank FATCA and CRS Entity Self-certification form.

If your entity account information changes, or if US indicia (indicators) are identified by Nedbank, we are required to validate and possibly recertify your entity's details to ensure compliance in terms of the FATCA and CRS legislation.

It is important to remember that a change in circumstance refers to any change that results in the addition or alteration of client information or changes to controlling person(s)* information linked to that client.

Examples of changes in circumstance include the following:

• The entity’s country of incorporation changes to another country.
• The entity’s place of effective management* changes to another country.
• The status of the entity changed from an active non-financial entity ("NFE") to a passive NFE* or vice versa.
• The entity changed from being a non-financial entity to a financial institution or vice versa
• The entity’s controlling persons change either through:
  • adding more controlling persons;
  • substituting controlling person;
  • or any other changes relating to controlling persons* such as a change in the tax residency; or physical address of an existing controlling person.

Where your entity is required to provide Nedbank with one of the US Internal Revenue Service (IRS) W-forms*, it is important to note that the IRS W-8BEN,  W-8BEN-E and W8 ECI forms (required under FATCA) are valid for three years.  However, if there is a change in circumstance, then these forms would become automatically invalid and would need to be renewed. Nedbank will notify you when this is needed.

However, the W-9 form remains valid unless there is a change in circumstances. 

*For any defined terms please see the Table of terms and definitions.

Nedbank is required to report CRS information to the relevant tax authority in respect of all accounts held by:

• Entities* who are resident for tax purposes in a country outside the country of onboarding due to their country of incorporation and /or place of effective management*; or
• Certain entities with controlling persons* who are resident for tax purposes outside the country of onboarding. These entity types include passive non-financial [foreign] entities* (passive NFEs), trustee documented trusts, and investment entities* that are resident in a non-participating jurisdiction* and is managed by another financial institution* in a participating jurisdiction.

In addition, Nedbank will also need to report account information relating to those entities who do not provide Nedbank with the required Nedbank FACTA and CRS Entity Self-certification form and any IRS W-form* as the case may be.

*For any defined terms please see the Table of terms and definitions.

An entity* will be a US* reportable account* if:

• The entity itself was incorporated or organised in the US;
• The entity is a passive non-financial [foreign] entity (passive NFE) with one or more controlling US persons*;
• The entity is a non-participating FFI*; or
• The entity is non-compliant with US indicia.

*For any defined terms please see the Table of terms and definitions.

Nedbank is required to report all mandatory information as set out in both the IRS and Organisation of Economic and Cooperative Development (OECD) reporting schemas, either to the IRS or the relevant tax authority in order to comply with the FATCA and CRS legislation.

All accounts held by US entities (US persons*) will be reported to the IRS and all accounts that have tax obligations, tax liabilities or tax residencies outside the country of onboarding will be reported to the relevant tax authority.

The information is entity-specific and will relate to the accounts held by entities that are defined as US Persons*, or entities that have tax obligations, tax liabilities or tax residencies outside the country of onboarding.

Furthermore, certain entity types that are not US persons* or that do not have tax obligations, tax liabilities or tax residencies outside the country of onboarding, may also be reportable where the entity has controlling persons* that are either defined as US Persons* and/or have tax obligations, tax liabilities or tax residencies outside the country of onboarding.

These entity types that could be reportable due to their controlling persons are:

• Passive non-financial [foreign] entities (passive NFEs).
• Trustee documented trusts.
• Investment entities* that are resident in a non-participating jurisdiction and are managed by another financial institution in a participating jurisdiction*.

The following information will be reported:

• The name of the entity*.
• The address of the entity*.
• The entity’s registration number, if applicable.
• A place of incorporation outside the country of onboarding.
• A place of effective management* outside the country of onboarding.
• The entity’s account number.
• Each country of tax residence where the entity has tax obligations in.
• Every taxpayer identification number* (TIN) that the entity has provided, or the reason why the entity does not have a TIN.
• For selected entity
• classification types, we also would need to report additional information on the controlling persons* that are defined as either a US Person* and/or have tax obligations, tax liabilities or tax residencies outside the country of onboarding.
• The aggregated year-end balance for all the entity’s accounts.
• The gross proceeds on any disposal, income flows, gross withdrawals, or payments from the entity’s stockbroking and/or unit trust accounts.
• All payments made to, and from, the entity’s account, where the entity has been classified as a non-participating [foreign] financial institution* under FATCA.

#When the automatic exchange of information becomes available.

*For any defined terms please see the Table of terms and definitions.

Yes, every account holder* must self-certify by confirming in writing, through the completion, dating and signing of a Nedbank FATCA and CRS Entity Self-certification form, that the entity, as the account holder, is not a US* entity* (US Person*) and/or does not have tax obligations, tax liabilities or tax residencies outside the country of onboarding.

*For any defined terms please see the Table of terms and definitions.

No, because a controlling person* in terms of local legislation means each natural person who directly owns the required % (e.g., 20% for Namibia, 25% for Eswatini 20% for Zimbabwe and 25% for Lesotho) or more of the company's shares.

If the shareholder was a controlling person of a passive non-financial [foreign] entity* (passive NFE), the entity and the controlling person will be subject to FATCA. Additional information will be required, and the account will be reportable*

*For any defined terms please see the Table of terms and definitions.

No, because a controlling person* in terms of local legislation means each natural person who directly owns the required % (e.g., 20% for Namibia, 25% for Eswatini 20% for Zimbabwe and 25% for Lesotho) or more of the company's shares.

If the shareholder was a controlling person of a passive non-financial [foreign] entity* (passive NFE), the entity and the controlling person will be subject to FATCA. Additional information will be required, and the account will be reportable*

*For any defined terms please see the Table of terms and definitions.

Yes. Nedbank will always provide you with the relevant Nedbank FATCA and CRS Self-certification form that you need to complete.

Where an US Internal Revenue Service (IRS) W-form* is required, based on the notes set out in the Nedbank FATCA and CRS Self-certification form, Nedbank will direct you to the Nedbank website where you can download the forms.

*For any defined terms please see the Table of terms and definitions.

Clients can access the Glossary of terms and the US Internal Revenue Service (IRS) W-forms* from the relevant Nedbank Africa Regions websites:

• Nedbank Lesotho: www.nedbank.co.ls
• Nedbank Namibia: www.nedbank.com.na
• Nedbank Eswatini: www.nedbank.co.sz
• Nedbank Zimbabwe: www.nedbank.co.zw

*For any defined terms please see the Table of terms and definitions.

Clients can obtain the Nedbank FATCA and CRS Individual and Controlling Person Self-certification form, as well as the Nedbank FATCA and CRS Entity Self-certification form, from the relevant relationship manager/banker, or at the nearest Nedbank branch.

Yes, Nedbank will respect your data privacy. We will only disclose your information to the relevant tax authority if we are legally required to do so.

Client information is protected by a strict code of secrecy and security which all members of the Nedbank Group, their staff and third parties are subject to. This includes the use, retention, disposal, safeguarding and disclosure of personal information to third parties.

Furthermore, all data transmitted to the relevant tax authority is encrypted.

Where permitted Nedbank employees will endeavour to assist you, although they are not tax advisors and will not be able to provide tax advice. For this you may wish to consult an independent tax advisor.

The way in which banks and financial institutions* collect information from their clients in order to confirm whether or not they have foreign tax obligations, tax liabilities or tax residencies under Foreign Account Tax Compliance Act (FATCA) and Common Reporting Standard (CRS) may vary. This means that, in some instances, Nedbank may ask you for different documentation when compared to another bank.

All financial institutions* - that includes banks, insurers, and asset management businesses - in participating countries/jurisdictions* are required to be compliant with both FATCA and CRS legislations.

*For any defined terms please see the Table of terms and definitions.

Nedbank is committed to being fully compliant with FATCA and CRS.

Nedbank may not open new accounts or offer additional products and services to clients who choose not to comply with requests for information and/or documentation to establish their FATCA and CRS status.

For existing clients who do not provide the required FATCA and CRS information and/or documentation, Nedbank will be forced to restrict the account and may be required to report these existing clients to the relevant tax authority, based on the information and documentation we hold in our possession currently.

We therefore ask our clients to respond to any requests to provide us with the required FATCA and CRS information and/or documentation so that we can ensure that you are FATCA and CRS compliant. This is also an opportunity for our clients to update their personal information.

In summary, any client, whether new or existing, who chooses not to comply with Nedbank's requests for information and/or documentation to establish their FATCA and CRS status will have their accounts restricted and be reported as non-compliant to the relevant tax authority.

In addition, withholding tax may be imposed on certain US source payments coming into your account.

You have 30 days within which to provide Nedbank with the Nedbank FATCA and CRS Self-certification form, whereafter your account will be restricted. As soon as your self-certification form has been received, then Nedbank will remove the restrictions on your account.

Furthermore, due to the fact that Nedbank does not have sufficient information to determine whether you are a US person* or have tax obligations, tax liabilities or tax residencies outside the country of onboarding, Nedbank will have to report you to the relevant tax authority.

*For any defined terms please see the Table of terms and definitions.

If you have closed your account during the current year, Nedbank will be required to confirm whether your account is reportable for FATCA and CRS purposes.

If a reportable account* is closed during a reporting period, its details need to be included in Nedbank’s FATCA and CRS return for that period. It is important that you respond to all requests for FATCA and CRS information even if you believe you have already supplied it, or the account has been closed within the year.

*For any defined terms please see the Table of terms and definitions.

If your previously submitted FATCA and/or CRS information is now incorrect or out of date, you must notify Nedbank by submitting a revised Nedbank FATCA and CRS Self-certification form.

As with Anti-money laundering (AML) legislation any account holder* that does not submit the correct Foreign Account Tax Compliance Act (FATCA) and Common Reporting Standard (CRS) information and/or documentation, including the Nedbank FATCA and CRS Self-certification form, will result in their accounts being restricted. Furthermore, financial penalties in the form of administrative fines from the relevant tax authority may be imposed.

*For any defined terms please see the Table of terms and definitions.

We will try to assist you as much as possible, however, we are not able to provide tax advice. For this you may wish to consult an independent tax advisor as Nedbank employees are not tax advisors.

• More information about FATCA is available at www.irs.gov.
• More information about CRS is available on OECD* Automatic Exchange of Information portal at www.oecd.org.

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*For any defined terms please see the Table of terms and definitions.