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Regulatory Compliance and Information

Foreign Account Tax Compliance Act (FATCA)
Common Reporting Standard (CRS)
FATCA and CRS Compliance Procedures
Qualified Intermediary (QI)
Qualified Derivatives Dealer (QDD)
Forms and Documentation:
FATCA&CRS Self-Certification Forms

Important Note

 

Foreign Account Tax Compliance Act (FATCA)

The U.S. Foreign Account Tax Compliance Act (FATCA) is a regulatory framework that requires financial institutions, such as International Trading System Limited (ITS) and ITS Central Securities Depository Limited (ITS CSD), to collect and report tax-related information concerning its clients (Account Holders) and their accounts. This obligation arises particularly when the Account Holder or any Controlling Person is identified as a U.S. Person. In compliance with Intergovernmental Agreement between Republic of Kazakhstan and the United States, ITS and ITS CSD are legally obligated to transmit information about U.S. Persons and their financial accounts to local tax authorities, facilitating transmission to the U.S. Internal Revenue Service (IRS).

ITS and ITS CSD are committed to stringent FATCA compliance, demonstrating its dedication to transparency and regulatory adherence:

  • ITS was registered on the IRS portal on May 29, 2023 as a Reporting Model 1 FFI, ITS during initial registration was assigned a global intermediary identification number (GIIN): Y5F2CC.99999.SL.398. As part of the expansion of the Group structure, ITS re-registered as a Leading FFI on May 17, 2024 and received a new GIIN as the head of the group: 9VRVS9.00000.LE.398;
  • ITS CSD was registered on the IRS portal on June 06, 2024 as a member of Expanded Affiliated Group (EAG) and as a Reporting Model 1 FFI. ITS CSD was assigned a global intermediary identification number (GIIN): 9VRVS9.00001.ME.398.

For more in-depth information about FATCA, its implications, and more, please visit www.irs.gov/fatca.

Common Reporting Standard (CRS)

In the global effort to combat tax evasion, governments have implemented the Common Reporting Standard (CRS). This mandates financial institutions like ITS and ITS CSD to determine the tax residency of its clients (Account Holders) or any Controlling Persons. If a client is tax resident outside the country/jurisdiction where the financial account is held (e.g., Republic of Kazakhstan), ITS or ITS CSD will be required to furnish relevant details to the local tax authority. Subsequently, this information may be shared with the tax authority of the client's tax residence.

For a comprehensive understanding of CRS, its objectives, and more, please visit www.oecd.org.

FATCA and CRS Compliance Procedures

To adhere to the regulatory requirements of FATCA and CRS, ITS and ITS CSD follow stringent procedures, including:

  • Client Identification: ITS and ITS CSD are obligated to identify clients subject to declaration for tax purposes in applicable jurisdictions.
  • FATCA&CRS Self-Certification Forms: ITS and ITS CSD require clients to complete specific self-certification forms for both FATCA and CRS, providing essential information regarding their tax residency and status.
  • IRS W-8/W-9 Forms: In cases where clients would like to reduce withholding tax rates under double tax treaty agreement with United States, or for clients who are U.S. Persons or entities, ITS and ITS CSD collect corresponding W-8 and W-9 forms.
  • Comprehensive Information Transmission: Relevant details, including tax residency, account numbers, balances, and related financial income, are systematically transmitted to tax authorities (annually or by the request).

 

Qualified Intermediary (QI)

The Qualified Intermediary (QI) status is an optional designation introduced by the U.S. Internal Revenue Service (IRS) in 2001. This status allows non-U.S. financial entities to apply reduced withholding tax rates on U.S.-source income. In return, the QI entities have to fulfill regulatory obligations (documentation, withholding, reporting and compliance) towards the US tax authorities. While ITS and ITS CSD currently do not hold the QI status directly, it collaborates with upstream custodians possessing QI status. This collaboration enables the application of reduced withholding tax rates for ITS clients based on the information provided through IRS W-8/W-9 forms.

Qualified Derivatives Dealer (QDD)

Introduced by the IRS in 2017, the Qualified Derivatives Dealer (QDD) status is an optional designation granted to entities that have entered into a QI agreement with the IRS and qualify for this status. Entities with QDD status acting as principals in potential section 871(m) transactions avoid cascading withholding taxes on U.S. source dividend equivalent payments. In return, the QDD entities have to fulfil both QI regulatory obligations and the QDD related ones (documentation, withholding, QDD tax liability, reporting and compliance) towards the US tax authorities. While ITS does not currently hold QDD status, it engages with upstream custodians possessing both QI and QDD statuses. This collaboration ensures that ITS clients are exempt from cascading withholding taxes, leveraging the information provided through IRS W-8/W-9 forms.

Regulations, Forms and Documentation

Compliance with FATCA and CRS regulations necessitates the collection of detailed information from clients. ITS and ITS CSD utilize the following forms and documentation:

FATCA&CRS Self-Certification Forms
  • ITS FATCA&CRS Self-Certification form for Entities (pdf)
  • ITS FATCA&CRS Self-Certification form for Individuals (pdf)
  • ITS CSD FATCA&CRS Self-Certification form for Entities (pdf)
  • ITS CSD FATCA&CRS Self-Certification form for Individuals (pdf)
Applications (withholding statements) for ITS CSD purposes
  • Application (withholding statement) for tax withholding at payment of Income on US issuer’ Securities, that are subject to provisions of Chapters 3 and 4 of the US Tax Code, for House Accounts and (or) Trading House Account of an owner, who is not a tax resident of the US, filled in regarding the Client (doc)
  • Application (withholding statement) for tax withholding at payment of Income on US issuer’ Securities, that are subject to provisions of Chapters 3 and 4 of the US Tax Code, for Omnibus Account or (and) Trading Omnibus Account, filled in regarding the Client having no QI status in accordance with the US Tax Code (doc)
  • Application (withholding statement) for tax withholding at payment of Income on US issuer’ Securities, that are subject to provisions of Chapters 3 and 4 of the US Tax Code, for Omnibus Account or (and) Trading Omnibus Account , filled in regarding the Client having QI status in accordance with the US Tax Code (doc)
  • Application (withholding statement) for tax withholding at payment of Income on US issuer’ Securities, that are subject to provisions of Chapters 3 and 4 of the US Tax Code, for Omnibus Account or (and) Trading Omnibus Account , filled in regarding the Client having QI status in accordance with the US Tax Code with withholding obligations (doc)
IRS W-8/W-9 Forms for ITS and ITS CSD purposes
Regulations and Provisions
  • Regulations on Information Exchange (pdf) for implementation of the US Foreign Account Tax Compliance Act (FATCA) and other legislation in the field of taxation of Income from Securities of Foreign Issuers of ITS
  • Provision on compliance with FATCA and CRS requirements by ITS (pdf)
  • Provision on compliance with FATCA and CRS requirements by ITS CSD (pdf)
  • Provision on Compliance  with the Qualified Intermediary Agreement with an additional function of a Qualified Derivative Dealer (QI/QDD Agreement) (pdf)

 

Important Note

As a financial institutions, ITS and ITS CSD are prohibited from providing tax advice. Should you have any questions regarding form completion or need assistance in determining your tax residency or status, it is advisable to consult with your tax advisor.

For an in-depth understanding of the regulatory landscape, please refer to the FATCA Overview and CRS Information.