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INFORMATION DOCUMENT ABOUT FATCA AND CRS REGULATIONS

What is FATCA?

Foreign Accounts Tax Compliance Act  (FATCA) was enacted on March 18, 2010 by the US Department of the Treasury and Internal Revenue Service (IRS) and went into effect as of July 1, 2014. The objective of the act is to prevent tax evasion by real persons and legal entities who are tax residents in the US with respect to US taxation (see further information about tax residency) on their income and assets, and to establish a transparent and traceable tax practice. Within the scope of compliance with FATCA regulation, bilateral agreements have been signed between the US and other countries for mutual information exchange purposes. “Agreement to Improve International Tax Compliance Through Enhanced Exchange Information (FATCA Agreement)” was signed between the Republic of Turkey and the Government of United States on 29 July 2015; the approval of the Turkish Grand National Assembly on 16 March 2016 and the approval of the Council of Ministers on 5 October 2016 were published in Official Gazette. In accordance with FATCA regulation, financial entities in the countries signed FATCA Agreement with the US must identify their customers who may be US citizens or tax residents in the US and report the account information of these customers to Republic of Turkey Ministry of Treasury and Finance – Revenue Administration annually.

What is CRS?

Common Reporting Standard (CRS) is a regulation that aims to prevent tax evasion and to record the income subject to tax through mutual information exchange by the jurisdictions within the scope of CRS. The regulation was released to public on 13 February 2014 under the name of “Common Reporting Standard” by OECD (Organisation for Economic Co-operation and Development). The document that explains how the CRS will be implemented, Standard for Automatic Exchange of Financial Account Information in Tax Matters, was published on 21 July 2014. The country number that committed to implement CRS is much more than 100 and Turkey is one of them.

Republic of Turkey Ministry of Treasury and Finance – Revenue Administration signed on 21 April 2017 “Multilateral Competent Authority Agreement on Automatic Exchange of Financial Account Information” and established Guidance Related Tax Residency and Due Diligence in order to implement CRS regulation in Turkey. The guidance document was published in the data transmission system of Revenue Administration, BTRANS, and the financial institutions in Turkey were informed via an official letter about that the requirements explained in the document are into force as of 1 July 2017.

Are FATCA and CRS regulations in force?

FATCA regulation started to be implemented as of 1 July 2014. Nevertheless, the transition date to the implementation may vary on a country basis according to the bilateral agreements signed between the US and the other countries. The internal legal procedures to put “FATCA Agreement” signed between the Republic of Turkey and the Government of United States into force have been completed with the approval of Council of Ministers published on 5 October 2016 in the Official Gazette and the diplomatic process is ongoing between Turkey and the US.

CRS regulation has started to be implemented in Turkey on 1 July 2017 with the official informative letter sent by Republic of Turkey Ministry of Treasury and Finance – Revenue Administration to the financial institutions in Turkey.

Garanti BBVA's responsibility within the scope of FATCA and CRS regulations

As Garanti BBVA, we are showing ultimate attention to comply with all national and international laws and other regulations to the extent allowed by local legislation. Within the scope of FATCA and CRS regulations, we must

    • Identify our customers who may be tax residents out of Turkey (see the tax residency rules applicable in countries) in accordance with the due diligence requirements in the regulations,
    • Obtain required information and documentation from our customers
    • Submit the account information of reportable customers to the Revenue Administration annually.

Accordingly, we, just like all other banks, are requesting certain information and documentation from our customers to verify their status within the scope of FATCA and CRS regulations.

Do all banks in Turkey have to comply with FATCA and CRS regulations?

All banks in Turkey have to comply with FATCA and CRS regulations because complying with these regulations becomes a legal requirement in accordance with local legislation when FATCA Agreement between Turkey and the US and multilateral and bilateral agreements signed for CRS come into force. The competent authority for implementing FATCA and CRS regulations in Turkey is Republic of Turkey Ministry of Treasury and Finance. To comply with FATCA and CRS regulations is a legal requirement for the banks, not a discretionary implementation. However, there may be some differences between implemented processes by the banks to comply with these regulations.

Warning: This document about FATCA and CRS regulations, prepared for our customers, is intended for informative purposes only. Information will be updated based on the regulations, announcements and guides that have been issued and will be issued by the authorized bodies (Republic of Turkey Ministry of Treasury and Finance Revenue Administration, US Internal Revenue Service, Organisation for Economic Co-operation and Development). As Garanti BBVA, we are unable to carry out a detailed assessment about our customers' tax obligations in other countries different than Turkey and possible tax sanctions that they may face, to guide our customers and to give tax consultancy to them. We only fulfil our obligations required by the relevant regulations with regards to compliance with FATCA and CRS regulations.  Therefore, we recommend you to contact a professional tax consultant for more detailed information and tax advice.

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Yours Sincerely,

Garanti BBVA

As Garanti BBVA, including its domestic and overseas branches and subsidiaries, is only responsible to fulfil its obligations required by the relevant legislation, it cannot be held responsible for any mistakes or omissions in this document that has been prepared for informative purposes only.