Since 2014, Swedish banks have been sending letters to Swedish Americans informing them of the Foreign Account Tax Compliance Act (FATCA). The letters state that the recipient’s American citizenship may trigger a requirement for the bank to report information about their accounts to the US Internal Revenue Service (IRS). The FATCA letter might have a direct impact on you if you are a US person with assets in Sweden.
Are you a Swedish citizen with an American background who recently received a FATCA letter from your Swedish bank? You should not disregard this letter. These are the most important details about the letter from your Swedish bank.
The Foreign Account Tax Compliance Act (FATCA) is a new piece of legislation by the United States Department of Treasury (Treasury) and the US Internal Revenue Service (IRS) to counter tax evasion.
Each country must sign the FACTA agreement for it to apply in the country. Countries and financial institutions that do not sign the agreement risk paying 30% taxes on payments from the US.
The Swedish-American FATCA Agreement was signed on August 8, 2014, and entered into force on 1 April 2015. The agreement is reciprocal, which means that the IRS will have access to information about US citizens’ capital assets and revenue managed by or paid to Swedish financial entities. Similarly, the Swedish Tax Agency obtains information about the Swedish citizen’s assets and revenue managed by or paid to US financial entities.
As a result, if you are a US person with assets in Sweden, FATCA may have a direct impact on you.
Since 2014, Swedish banks have been sending letters to Swedish Americans informing them of FATCA. The letters state that the recipient’s American citizenship may trigger a requirement for the bank to report information about their accounts to the IRS.
Swedish Americans who have never lived in the US may be surprised to receive such a letter. However, FATCA is a US law that requires foreign financial institutions to report information about Americans’ accounts to the IRS. This includes accounts held by Americans who have never lived in the US.
Swedish banks like Nordea, Handelsbanken, Skandinaviska Enskilda Banken (SEB), Swedbank, Skandia, or the Skatteverket are required to send these letters because they are considered “foreign financial institutions” under FATCA. The letters are sent to Swedish Americans who are considered “US persons” under FATCA.
US persons include US citizens and green card holders, as well as some people who have never lived in the US. Swedish Americans who receive these letters should not be alarmed.
You have not done anything wrong if you received a FATCA Sverige letter from your bank. It is simply a request for account information. You should respond as soon as possible to the letter.
If you do not, your account may be closed or blocked.
The bottom line is that it’s wise to be aware of your American tax obligations and undertake steps to file the necessary tax returns: Americans Overseas can assist you in these matters free of charge and without obligations.
We, the founders of Americans Overseas, were born in the Netherlands and obtained our American nationality through our (American) mother. When we heard about this for the first time around 2013, we were in total disbelief (it can’t be true!), anger (how can they do this?), fear (am I going to get fined or pick up other problems?), and panic (what should I do?).
It is (unfortunately) true that there is an additional American tax levy. But there’s no information from the local government, and when approached, the consulate referred us to the IRS, and the IRS was impenetrable.
That’s why we started this initiative to help people from all over the world by providing proper information to avoid unnecessary panic, and offering help free of obligation and free of charge. If needed, we have a network of affordable professionals (accountants) who can help you with your tax obligations.
If you have more questions about the FATCA Sverige or the American tax obligation you can contact us at Americans Overseas.
Understanding the US tax system, the obligations, and all the additional terms can be difficult. Especially if one lives outside of America. Is your question not answered? Contact us.
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