USA to Tighten UBO Disclosure Rules

May 7, 2016 Taxation in USA

WASHINGTON D.C. – New rules in the USA could spell the end for anonymous shell companies, as the Treasury proposes much stricter requirements for UBO disclosure.

On May 5th the US Department of the Treasury issued a statement announcing new regulations aimed at fighting tax evasion and money laundering by expanding the requirements for disclosing the identities of ultimate beneficial owners.

Under the scope of the new regulations proposed by the Treasury, all financial institutions in the USA would be required to obtain information on the UBO of a company before prior to opening an account for that company.

The financial institutions would also be required to obtain information about the proposed business activities of the client, and would also be required to continue conducting regular risk assessments and identity checks over the course of the business relationship.

Additionally, the Treasury announced new regulations which would require all newly formed companies in the USA to disclose information about their UBOs to the Treasury at the time of formation.

In its announcement the Treasury also called for new rules which would require small foreign-owned Limited Liability Companies to obtain an employer identification number and report information to tax authorities, as currently such entities are not required to make any significant disclosures to the IRS.

Each of the proposed regulations still needs to be approved by Congress before being enacted and brought into force.

Photo By: Ivan David Gomez Arce