Non-US Domiciled Funds/ETFs and CRS

[Rentonx]

I'm an Argentina resident about to invest through a US broker in Ireland & Luxemburg-domiciled Funds and ETFs (which include US and non-US assets).

My question is: when it comes to CRS, will the assets I hold in the funds or ETFs be reported to Argentina through CRS (because Ireland and Luxemburg, the countries where the funds are domiciled are part of CRS) or will they not (because the US, where my broker is domiciled, is not part of CRS)?

 

[zzzzzz]

I'm an Argentina resident about to invest through a US broker in Ireland & Luxemburg-domiciled Funds and ETFs (which include US and non-US assets).

My question is: when it comes to CRS, will the assets I hold in the funds or ETFs be reported to Argentina through CRS (because Ireland and Luxemburg, the countries where the funds are domiciled are part of CRS) or will they not (because the US, where my broker is domiciled, is not part of CRS)?

If your broker is in US, your brokerage account and income will be reported to Argentina via FATCA agreement.

 

[Rentonx]

@zzzzzz thank you kindly for your reply. So you are saying that a fund or ETF's domicile country bears no relationship with how reporting to the investor's country would work? Just the brokerage's domicile matter for this?

 

[JustAnotherNomad]

Will they really report automatically under FATCA? Is it not only on request from the Argentinian authorities?

 

[Martin Everson]

Will they really report automatically under FATCA?

Yes FATCA is bilateral and automatic and people have been reported already.

Some good reading in this thread before asking further question on topic .

Do I understand that US financial institutions DO NOT report non-us person deposits in them?

US is the only country that has not signed CRS (common reporting standard) agreement. They collect info via FACTA, but they do not have a responsibility to share info on non-US person deposits in their financial institutions with the respective tax authorities of the non-US person country. Do I...

www.offshorecorptalk.com

 

[JustAnotherNomad]

Yeah, but Argentina is not on this list:

Foreign Account Tax Compliance Act

FATCA requires foreign financial institutions (FFIs) to report to the IRS information about financial accounts held by U.S. taxpayers, or by foreign entities in which U.S. taxpayers hold a substantial ownership interest. FFIs are encouraged to either directly register with the IRS to comply with...

home.treasury.gov

This article is a couple years old, but it doesn't sound like there's automatic reporting for Argentina:

Argentina and the United States surprisingly move forward to an agreement implementing FATCA. Possibly IGA 1. - Canosa Abogados

We know that, although the USA – during the administration of Barack Obama in June 2010- has subscribed the multilateral agreement of the Organization for Economic Co-operation and Development (OECD) on Administrative Assistance in Tax Matters (“MCAA”), the fact is that they have not ratified it...

canosa.com

 

[Rentonx]

My question was not really about Argentina and FACTA, but about which country reports your holdings in Funds and ETFs. Is it the country where the fund/ETF is domiciled, or the country where your broker is domiciled?

 

[Martin Everson]

Is it the country where the fund/ETF is domiciled, or the country where your broker is domiciled?

Answer is both can report depending on how you hold the assets either directly or via a broker.

https://assets.kpmg/content/dam/kpmg/mt/pdf/2018/01/fatca-crs-compliance-obligations-for-investment-funds-and-investment-managers.pdf

 

[Rentonx]

@Martin Everson Thanks for that! In my case, I would hold an Ireland fund or ETF via a U.S. broker. I understand the U.S. broker would report under FACTA, but would I get reported by the Ireland fund under CRS?

 

[zzzzzz]

My question was not really about Argentina and FACTA, but about which country reports your holdings in Funds and ETFs. Is it the country where the fund/ETF is domiciled, or the country where your broker is domiciled?

USA brokers (at least IB) hold assests in their name, so if you have some ETF's form Ireland, IB is listed outside as "owner", not you.

Apparently USA doesn't have FATCA agreement with Argentina. And no reporting via CRS, since US didn't sign CRS agreement.

 

[Martin Everson]

@Martin Everson Thanks for that! In my case, I would hold an Ireland fund or ETF via a U.S. broker. I understand the U.S. broker would report under FACTA, but would I get reported by the Ireland fund under CRS?

Good question. I honestly can't answer that because you would need to ask the broker on their custody and reporting arrangements. Brokers custody assets with different custodians, may hold in nominee name etc and often in different geographical locations which ultimately maybe subject to different handling and reporting rules etc. So ask broker.

Apparently USA doesn't have FATCA agreement with Argentina.

Does not matter as its down to each FI to register with FATCA and not the country. A FATCA agreement just mandates a countries FI's to register with FATCA. Each FI in Argentina can voluntarily register for FATCA and obtain a GIIN number for FATCA reporting. Looking at the FATCA register below of FI's in Argentina I see 1,493 FI's registered voluntarily...lol .

https://apps.irs.gov/app/fatcaFfiList/flu.jsf

 

[JustAnotherNomad]

Does not matter as its down to each FI to register with FATCA and not the country. A FATCA agreement just mandates a countries FI's to register with FATCA. Each FI in Argentina can voluntarily register for FATCA and obtain a GIIN number for FATCA reporting.

Surely that must be about reporting on US citizens/residents, not the other way around? It wouldn't make sense for a US broker to report to all Argentinian FI's, just in case that person might also be a customer there?

 

[Rentonx]

Surely that must be about reporting on US citizens/residents, not the other way around? It wouldn't make sense for a US broker to report to all Argentinian FI's, just in case that person might also be a customer there?

Yes, as I understand it from sources here, that's the case. It's a unilateral agreement

 

[Martin Everson]

Surely that must be about reporting on US citizens/residents, not the other way around? It wouldn't make sense for a US broker to report to all Argentinian FI's, just in case that person might also be a customer there?

Yes for Argentina FI's that signed up it about reporting americans.

 

[zzzzzz]

Yes for Argentina FI's that signed up it about reporting americans.

I assume @Rentonx is Argentinian citizen and resident, in that case it doesn't matter.