O Foreign Account Tax Compliance Act (FATCA)e sua aplicabilidade ao Banco de Desenvolvimento de Minas Gerais (BDMG)

Abstract

In September 23, 2014, Brazil and United States of America signed an international agreement in order to exchange information about financial accounts: Agreement Between the United States of America and Brazil to Improve International Tax Compliance and to Implement FATCA. FATCA (Foreign Account Tax Compliance Act) is an U.S. law, published in 2010, with the objective to fight tax evasion practiced by U.S. citzens and/or companies by collecting bank account information from foreign financial institutions. The sanction with respect to FATCA non-compliance is a witholding tax of 30% with respect to any payment wich is from sources within the United States. This study aims to analyze FATCA and, in anespecific way, its applicability to the Banco de Desenvolvimento de Minas Gerais (BDMG) (Minas Gerais Development Bank). BDMG is a financial institution under Brazilian laws, but not similar to an ordinary commercial bank, due to singular characteristics, allowing realizing that BDMG does not fits in FATCA definition of Foreign Financial Institution (FFI). In conclusion, BDMG is not an FFI by the means of FATCA, but a Non-Financial Foreign Entity (NFFE), fitting the exception list as a wholy owned agency of a political subdivision of a foreign government. Furthermore, BDMG fits the definition of 'low risk of tax evasion',because its singularity make it unappealing for the practice of hiding assets.