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FATCA / EAI for an individual entrepreneur

To fight against tax evasion, the government has asked financial institutions to implement solutions to collect and verify their customers' tax information. This is the role of FatacaEai Feature, which consists of verifying FATCA information and related documents at the onboarding phase, analyzing the FATCA information versus the customer banking usage during the relationship and finally reporting to tax institutions.

The facta eai status is part of the Individual entrepreneur status.

Note

The verification is conducted between:

  • the physcial person's fiscal residence, and
  • its country of physical residence.

Definitions
FATCA (Foreign Account Tax Compliance Act) is a mandatory reporting resulting from a US law to combat tax evasion by US taxpayers.

EAI (Échange automatique d'informations) : For countries that have signed an agreement to prevent tax evasion.
https://www.oecd.org/tax/automaticexchange.htm



Fatca Eai sequence diagram​

Fatca Eai steps​

The FatcaEai functionality consists of a 3-step process:

  • Collection of the customer's tax information
  • Validation of the consistency/likelihood of the tax information, document analysis (scope of the KYC brigade) and Fatca validation
  • Display of Fatca self-certification


Collect Customer Tax Information​

PATCH /api/sca/v3.0/users/{individualEntrepreneurId}/fatca-eai

A customer can declare the maximum of three tax countries along with their respective tax identification numbers.

At this stage, we perform some basic checks to ensure that the mandatory fields are filled in and that the TIN is correct according to the format (combination of numbers, letters, and characters) given by the tax country

For each TIN provided by the customer, an action takes place to verify its format and coherence considering the tax country associated to it.

The TIN is optional if:



Fatca Eai status diagram: Tax Information Consistency / Vraisemblance​

The first step is to check whether the user has declared himself to be an American. If so, documents are requested.

The second step includes the consistency validation among client’s identity information, his currently country of residence and tax countries inserted. It’s also called Vraissemblance (French for likelihood, apperance of truth).

A synchronous response of the API PATCH fatcaEai allows to see the results of these controls and to know what the required document is.

When the controls fail, the customer will need to provide document(s) to justify and support his tax declaration :

  • W9 = required when the customer tax declaration is related with USA
  • W8-Ben = required to declare that an USA citizen or resident is not an USA contributor
  • Other documentation = required to justify and support his tax declaration

It’s important to mention that “Vraissemblance checks” do not verify the information inside any document, it is done by an agent.

To follow the evolution of this entire Fatca process, the field fatcaEaiStatus is updated .
The field fatcaEaiStatus can have 3 possibles values:

  • enum 0 = NOK,
  • enum 1 = Pending,
  • enum 2 = OK

individual_entrepreneur_fatca_status.png

FatcaEaiStatus OK​

If the user is not American, and all the checks are good, then the status is validated.
Callback #44 is sent with the fatcaEaiStatus OK.

The GET /api/v3.0/users/{individualEntrepreneurId}/fatca-eai allows you to return:

  • taxIdentificationNumberStatus OK
  • vraisemblanceStatus OK
  • fatcaEaiStatus OK

FatcaEaiStatus NOK​

Otherwise, Callback #44 describes the expected document(s).
The user needs to upload documents, using a dedicated endpoint POST /api/v2.0/users/{individualEntrepreneurId}/fatca/attachments
Important to mention that the vraissemblance value does not change, even if FatcaEaiStatus changes for OK.

The diligences have 3 statuts: Validated/ To_Review_Manually/Refused

ExpectedDiligenceDiligence1StatusDiligence2Status_or_Diligence3StatusFatcaEaiStatus
1No Diligence ReceivedNANOK
1To Review ManuallyNAPending
1RefusedNANOK
1ValidatedNAOK
2 or 3No Diligence ReceivedNo Diligence ReceivedNOK
2 or 3To Review ManuallyNo Diligence ReceivedPending
2 or 3RefusedNo Diligence ReceivedNOK
2 or 3ValidatedNo Diligence ReceivedPending
2 or 3To Review ManuallyTo Review ManuallyPending
2 or 3To Review ManuallyValidatedPending
2 or 3ValidatedValidatedValidated
2 or 3RefusedRefusedRefused
2 or 3RefusedValidatedRefused

W8 or W9 as FATCA attachments​

If W8 or W9 are expected, here are the templates:


Other Document for EAI​

In the EAI process, when an "other document" is requested, it is necessary to ask the customer to justify the difference between its country of residence and the country in which it pays tax.
This explanation are given in a text document which is sent by API to Xpollens.

Once the explanation has been received, it is studied by the Xpollens Middle Office team, who will indicate which document is required.

In most cases, an employee will be asked to provide proof of tax assessment, while a student will be asked to provide a school leaving certificate.



Display fatca eai certification​

The partner must make this document available for the customer at any time once the onboarding path has been confirmed. This certification is not archived in Xpollens DB, it is generated everytime a partner asks for it.

GET /api/v2.0/users/{individualEntrepreneurId}/fatca/attachments/{Key}



APIs, callbacks and technical items​

PATCH /api/sca/v2.1/user/{individualEntrepreneurId}/fatcaEai​

The strong authentication is mandatory for Agent Partners.

GET /api/v2.1/user/compliance/{individualEntrepreneurId}​

GET /api/v2.1/user/{individualEntrepreneurId}/self-certification​

POST /api/v2.0/users/{individualEntrepreneurId}/fatca/attachments​

Callback 44​

A partner logo is required for the self-certification file. It must have the following format: 100px x 372px (19,3mm x 74,2mm)



FAQ​

Coming soon



How to test FATCA/EAI​

Let see some examples:

User Personal DataUser Fatceai input dataUser FatcaEai resultComments
User birth country: FR
User Country of Residence: PT		1st tax country: PT
2nd tax country: null
3rd tax country: null		Vraisemblance status: OK <br>Fatcaeai status: OK
User birth country: US
User Country of Residence: FR		1st tax country: US
2nd tax country: FR
3rd tax country: null		Vraisemblance status: OK
Fatcaeai status: NOK		W9 document it’s required when the customer tax declaration is related with US
User birth country: FR
User Country of Residence: US		1st tax country: US
2nd tax country: FR
3rd tax country: null		Vraisemblance status: OK
Fatcaeai status: NOK		W9 document it’s required when the user tax declaration is related with US.
User birth country: US
User Country of Residence: FR		1st tax country: PT
2nd tax country: FR
3rd tax country: IT		Vraisemblance status: NOK
Fatcaeai status: NOK		The customer is a US citizen, but he did not declare US on his taxes.
W8-Ben is required to declare that the customer is not an US contributor
User birth country: US
User Country of Residence: FR		1st tax country: US
2nd tax country: null
3rd tax country: null		Vraisemblance status: NOK
Fatcaeai status: NOK		W9 document it’s required when the user tax declaration is related with US.
Other documentation is required to justify and support his tax declaration
User birth country: FR
User Country of Residence: FR		1st tax country: PT
2nd tax country: IT <br>3rd tax country: null		Vraisemblance status: NOK
Fatcaeai status: NOK		The customer works in France, but he did not declare France on his taxes.
Other documentation is required to justify and support his tax declaration.

In pre-production, it is necessary to synchronise with the customer integration manager for end-to-end tests, with sandbox review carried out on request.



Appendix: Tin required​

Important

According to the taxCountry, the taxIdentificationNumber could be mandatory. Ask your Customer Integration Manager to obtain the list of expected taxIdentificationNumber by country.

CountryNametaxCountryIsTaxIdentificationNumberRequired
ANDORREAD1
ANGUILLAAI0
ALBANIEAL1
ARMENIEAM0
ARGENTINEAR0
AUTRICHEAT0
AUSTRALIEAU0
ARUBAAW0
AZERBAIJANAZ0
ILE DE LA BARBADEBB0
BELGIQUEBE1
BULGARIEBG1
BRUNEI DARUSSALAMBN1
BRESILBR1
BELIZEBZ0
CANADACA1
SUISSECH1
CHILICL0
CHINECN1
COLOMBIECO1
COSTA RICACR1
CHYPRECY0
TCHEQUE, REPUBLIQUECZ1
ALLEMAGNEDE1
DANEMARKDK1
DOMINIQUEDM0
EQUATEUREC0
ESTONIEEE1
ESPAGNEES1
FINLANDEFI1
FEROE, ILESFO1
FRANCEFR0
ROYAUME-UNIGB1
GRENADEGD0
GEORGIEGE1
GUERNESEYGG1
GHANAGH0
GIBRALTARGI1
GROENLANDGL1
GRECEGR1
HONG KONGHK1
CROATIEHR1
HONGRIEHU1
INDONESIEID0
IRLANDEIE1
ISRAELIL1
ILE DE MANIM1
INDEIN1
ISLANDEIS1
ITALIEIT1
JERSEYJE1
JAMAIQUEJM0
JAPONJP1
KENYAKE0
COREE, REPUBLIQUE DEKR1
KOWEIT (ETAT DU)KW1
KAZAKHSTANKZ0
SAINTE-LUCIELC0
LIECHTENSTEINLI1
LITUANIELT1
LUXEMBOURGLU1
LETTONIELV1
MOLDAVIEMD0
MARSHALL, ILESMH1
MACAOMO0
MALTEMT1
MAURICEMU0
MALDIVESMV0
MEXIQUEMX1
MALAISIEMY1
NIGERIANG1
PAYS-BASNL1
NORVEGENO1
NAURUNR1
NOUVELLE-ZELANDENZ1
PANAMAPA1
PEROUPE0
PAKISTANPK0
POLOGNEPL1
PORTUGALPT1
QATARQA0
ROUMANIERO1
RUSSIE, FEDERATION DERU1
ARABIE SAOUDITESA1
SEYCHELLESSC1
SUEDESE1
SINGAPOURSG1
SLOVENIESI1
SLOVAQUIESK1
SAINT-MARINSM1
SAINT-MARTIN (PARTIE NEERLANDAISE)SX1
TURQUIETR1
TRINITE-ET-TOBAGOTT0
ETATS-UNISUS1
URUGUAYUY1
VANUATUVU0
AFRIQUE DU SUDZA0