FATCA Interview Questions

Checkout Vskills Interview questions with answers in FATCA to prepare for your next job role. The questions are submitted by professionals to help you to prepare for the Interview.

Q.1 What is the purpose of FATCA?
The Foreign Account Tax Compliance Act (FATCA) is an important development in U.S. efforts to combat tax evasion by U.S. persons holding accounts and other financial assets offshore.
Q.2 What is FATCA?
The Foreign Account Tax Compliance Act (FATCA) is a US law, designed to prevent tax evasion by US citizens using offshore banking facilities. Under FATCA, US nationals, especially those living outside the country, have to report their financial accounts held outside.
Q.3 How does FATCA works?
FATCA requires FIs outside the US to provide information to the US tax authorities regarding financial accounts held by US nationals.
Q.4 Who is covered under FATCA?
Those whom the United States government considers as a ‘US person’ will be covered under the act which are: a citizen or resident of the United States (including a green card holder) or a partnership, corporation, estate, trust incorporated or created under US law (US incorporated entity) or a non-US incorporated entity having shareholding of 10% or more or ownership (Substantial Ownership) held by an Individual who was born in the US or is a US citizen or a US resident or has a US address or US mailing address or US ‘in care of’ or ‘hold mail’ as a sole address or a US incorporated entity as described above.
Q.5 Does only personal accounts are covered under FATCA?
No. FATCA covers both personal and business entities if you are covered under ‘US persons’
Q.6 If I am not a US citizen can I be covered under FATCA?
FATCA is not applicable to non-US citizens but FATCA is applicable if you have US citizenship or US residence or US place of birth or US address including US PO boxes or US telephone number.
Q.7 What should a US person do under FATCA?
Under FATCA, the US person is required to submit addition information along with the assets they hold.
Q.8 What if a partner is a US person in a joint account?
The joint account will be treated like as a US account and the entire account are subject to reporting as a US person under FATCA.
Q.9 Which FATCA form is for individual, is annual information return of foreign trust with a U.S. owner
Form 3520-A is for individual, is annual information return of foreign trust with a U.S. owner
Q.10 Which FATCA form is for individual, is information return of U.S. persons with respect to certain foreign corporations
Form 5471 is for individual, is information return of U.S. persons with respect to certain foreign corporations
Q.11 Which FATCA form is for individual, is information return by a shareholder of a passive foreign investment company or qualified electing fund
Form 8621 is for individual, is information return by a shareholder of a passive foreign investment company or qualified electing fund
Q.12 Which FATCA form is for individual, is statement of specified foreign financial assets
Form 8621 is for individual, is statement of specified foreign financial assets
Q.13 Which FATCA form is for individual, is annual return to report transactions with foreign trusts and receipt of certain foreign gifts
Form 3520 is for individual, is annual return to report transactions with foreign trusts and receipt of certain foreign gifts
Q.14 Does a partnership firm has ownership of/entitlement to more than fifteen per cent (15 %) of capital or profits of the partnership
Yes as per FATCA, a partnership firm has ownership of/entitlement to more than fifteen per cent (15 %) of capital or profits of the partnership
Q.15 Does Unincorporated Association or Body of Individuals has ownership of or entitlement to more than fifteen per cent (15 %) of the property or capital or profits of such association or body of individuals
Yes as per FATCA, Unincorporated Association or Body of Individuals has ownership of or entitlement to more than fifteen per cent (15 %) of the property or capital or profits of such association or body of individuals
Q.16 Does a company has a controlling ownership interest of more than 25%
Yes as per FATCA, a company has a controlling ownership interest of more than 25%
Q.17 Who is a company as per FATCA?
As per FATCA, a company is, who exercises control through right to appoint majority of the directors or to control the management or policy decisions including by virtue of their shareholding or management rights or shareholders agreements or voting agreements
Q.18 What documentation is needed to determine if a person is a US person under FATCA
The documents for US citizenship or US residence, US address including US PO boxes and US telephone number
Q.19 What is an Active NFE under FATCA?
If the entity during the last year: More than (or equal to) 50% of the entity’s gross income consisted of Active Income
Q.20 Does a non-profit organisation is an Active NFE
Yes, a non-profit organisation is an Active NFE
Q.21 If the entity perform activities that consist of holding one or more subsidiaries then, is it an Active NFE?
Yes, if the entity perform activities that consist of holding one or more subsidiaries then, it is an Active NFE
Q.22 How frequently does the FATCA information is asked?
It’s a periodic and ongoing process, which will generally be handled by the financial institutions but if there is a change in account information you will be contacted.
Q.23 What is a custodial institution under FATCA?
A custodial institution under FATCA holds financial assets for the account of others as a substantial portion of its business and has gross income attributable to the holding of financial assets and related financial services equals or exceeds 20% of the entity’s gross income during last three accounting periods
Q.24 Which entities are excluded from the FFI definition and not subject to withholding?
As per FATCA, entities which are excluded from the FFI definition and not subject to withholding includes Holding companies engaged in non-FI business, Start-up companies for non-financial business and Liquidating or reorganizing non-financial entities
Q.25 How FATCA discourage offshore tax abuses
FATCA increased transparency, enhances reporting and provides strong sanctions ageist abuse.
Q.26 Who can hold an account for the benefit of another person in FATCA?
Under FATCA, a person, other than a Financial Institution, who holds an account for the benefit of another person , can be agent or custodian or nominee
Q.27 Why do you want the FATCA professional job?
I want the FATCA professional job as I am passionate about making companies and individuals compliant to financial regulations more efficiently by using new technologies and take stock of present technology portfolio to maximize their utility.
Q.28 Why do you want to work as FATCA professional at this company?
Working as FATCA professional at this company offers me more many avenues of growth and enhance my financial compliance skills. Your company has been in the domain of consulting and hence offers opportunities for future growth in financial compliance role. Also considering my education, skills and experience I see myself, more apt for the post.
Q.29 What are your strengths as a FATCA professional?
As a FATCA professional I am having extensive experience on the application and submissions as per FATCA as well as managing the client's portfolio to be compliant as per FATCA. I also have the requisite managerial skills for managing a team of professionals for FATCA and financial compliance.
Q.30 How you keep yourself updated of new trends in FATCA?
I update myself by attending industry seminars, conferences as available online or offline.
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