The General Department of Taxation called last week on banks, insurance companies and microfinance institutions (MFIs) to accurately report the taxpayer identification numbers (US-TIN) of clients with US citizenship.
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The statement, issued on January 3 and signed by GDT’s general director Kong Vibol, said reporting accurate US-TIN numbers is necessary to comply with the Foreign Account Tax Compliance Act (Facta) that Cambodia has signed with the US.
It asked all financial institutions and insurance companies to make sure they have the right US-TIN for all their US citizens before filing their next tax return.
Local banks, insurance firms and MFIs have been expressing concern over the difficulty of obtaining the US-TIN for their US clients.
“Banks, insurance companies, and microfinance institutions have been having difficulty securing the US-TIN for tax-reporting purposes for the years 2017, 2018 and 2019,” the statement read.
FATCA requires all non-US financial institutions to search their records for customers with ‘US-person’ status, and to report the assets and identities of such persons to the US Department of the Treasury. It also requires such persons to self-report their non-US financial assets annually to the US Internal Revenue Service (IRS).
In Channy, president of Acleda Bank, said the Facta agreement plays an important role in Cambodia’s trade relation with the US.
“According to the agreement, the US receives information about the accounts of their citizens abroad,” he said. “If we don’t report this information, the US will take action.”