Policies and Compliance

Banks are subject to various obligations under FATCA and CRS, which are known as international regulations in the field of taxation. These obligations, which apply to all banks, have become internal legislation within the framework of international agreements and regulations made by the Ministry of Treasury and Finance.

FATCA and CRS regulations impose various obligations on both bank customers and banks. For customers, these obligations can be summarized as declaration of tax residency and providing additional information and documents when necessary. Banks, on the other hand, have the obligation to classify their customers in terms of their tax residency and to report their customers with foreign tax residency as specified by the legislation.

While detailed explanations on FATCA and CRS are available on the website of the Ministry of Treasury and Finance, the following summary information has been prepared for you on the meaning and scope of these practices.

FATCA is a US domestic tax law that imposes an obligation on non-US financial institutions to ascertain the US citizenship and US tax residency of their customers and to report to the US certain information regarding these individuals and entities in order to ensure the fair taxation of the taxable income of US citizens and US tax residents.

In order to comply with this law, the US Government and Turkey signed the “Agreement between the Government of the Republic of Turkey and the Government of the United States of America to Enhance International Tax Compliance through Enhanced Exchange of Information” on 29.07.2015. This agreement, which was approved by the Turkish Grand National Assembly, entered into force on 05.10.2016. FATCA obliges the signatory countries that have signed an information exchange agreement with the United States of America (USA) to identify individuals and legal entities that are or may become taxpayers in the USA and that meet the criteria specified in the agreement and to report the specified assets of these persons to the USA. Similarly, the agreement also stipulates that the United States shall report to the other country that is a party to the agreement within the same scope.

In accordance with the “Agreement between the Government of the Republic of Turkey and the Government of the United States of America to Enhance International Tax Compliance through Enhanced Exchange of Information” and the regulations made by the Revenue Administration of the Ministry of Treasury and Finance, our Bank identifies individual and legal entity customers who are taxpayers in the United States and shares information about the accounts of these customers with the Revenue Administration in line with various indicators and declarations.

More detailed information on FATCA can be found on the following web pages of the US tax authority and the Revenue Administration of the Ministry of Treasury and Finance.

The CRS is a global information exchange arrangement that aims to prevent tax losses that countries may face through the exchange of information between the countries in scope. At the G-20 summit in 2013, a FATCA-like international automatic exchange of information was put on the agenda and the CRS was adopted by the OECD in July 2014.

The agreement envisages the identification of tax residents of another participating country through financial account holding institutions (banks, brokerage houses, insurance companies, etc.) and the exchange of their financial information through the financial administrations of participating countries.

This regulation requires financial institutions to identify and document the countries where their clients are tax residents, and then to report annually to the fiscal authority to which they are affiliated the assets in the accounts of these persons and the financial income paid to these accounts. Turkey is one of more than 100 countries that have committed to implement the CRS through Law No. 7018 dated 20.05.2017. Under this Law, the Revenue Administration of the Republic of Turkey Ministry of Treasury and Finance requires banks to determine and report tax residency under the CRS for all newly opened accounts.

Those who are tax residents in other countries should review the “Guidance on the Standard for Automatic Mutual Exchange of Financial Account Information for Tax Matters” document published by the Revenue Administration of the Ministry of Treasury and Finance of the Republic of Turkey on 25.08.2020 and updated on 08.06.2021 and consult with a Financial Advisor for the possible effects of their tax residency status in other countries.

As DestekBank, we consider it important to take necessary steps to comply with the bilateral agreement made with the USA and CRS regulations in which we are included as an OECD member country within the scope of FATCA and CRS. We commit to identifying the accounts of our customers who are US taxpayers under FATCA legislation and our customers who are taxpayers in countries within the scope of CRS that will be subject to reporting, and reporting the information to be reported within the standards determined within the framework of both legislations annually to the official institutions of the relevant country.

The reporting responsibility has become a legal obligation for all banks as a result of the bilateral agreement made by the Republic of Turkey with the USA and the multinational agreements signed with OECD member countries and the regulations brought by the Revenue Administration within the framework of these agreements. Financial institutions in Turkey, which are considered as financial institutions within the scope of FATCA and CRS along with banks, are obliged to comply with the legislation, and non-compliant financial institutions and their customers may be subject to local and international sanctions as non-compliant.

Our customers who are US citizens (those with US passports, US taxpayers, and Greencard holders) and taxpayers in OECD member countries included in CRS are within the scope of reporting. We would like to remind that our customers who refuse to provide the information and documents requested by our Bank may be affected by both regulations.

For customers within this scope, their name-surname, address, date of birth, country/countries of tax residence, tax identification numbers in these country/countries, and if they have accounts subject to reporting, information about these accounts; year-end balances of these accounts and gross payments made to these accounts will be reported annually to the country where the account holder is resident.

Information regarding accounts that are mandatory to report under FATCA will be reported electronically to the Revenue Administration of the Republic of Turkey Ministry of Treasury and Finance by June 30 of the calendar year following the relevant year, while information regarding accounts subject to reporting under CRS will be reported by May 31 of the calendar year following the relevant year.

Our Bank requests written declarations from its customers to determine their tax liability status within the scope of FATCA and CRS. Additional information/document requests may also be made to verify these declarations depending on our customer's situation. Our existing customers who do not provide the requested declaration, information, and documents will be classified as "non-compliant" and included in the scope of reporting. Our Bank does not accept as customers those who do not provide the requested information and documents and who are not yet our customers.

Our Bank does not have the authority regarding the application of withholding tax on accounts within the scope of FATCA. Withholding tax may be applied by the USA and institutions authorized to withhold tax on US-sourced income earned by non-compliant financial institutions. Our Bank has fulfilled its necessary obligations at the point of full compliance with FATCA and is classified as a compliant financial institution within the scope of FATCA. There is no withholding application within the scope of CRS.