TLDR: If you hold a financial account as a passive non-financial entity, you must self-certify your tax residence and, where applicable, the tax residences and TINs of the individuals who control you. The financial institution verifies the plausibility of this information when the account is opened. Without information on the controlling individuals, the account cannot be opened.
Who must provide the self-certification?
The passive non-financial entity holding the account must provide information relating to the individuals who control it. The obligation therefore concerns the entity’s tax residence and, where applicable, that of its controlling individuals.
For a new account, the self-certification is collected when the account is opened. For a pre-existing account, the financial institution must determine the entity’s tax residence and check whether it is controlled by individuals who must be identified.
These obligations apply regardless of the tax residence of the entity or the individuals concerned.
What information must you provide?
The self-certification must indicate, for the entity:
- its state or territory, or states or territories, of tax residence;
- the TIN corresponding to each tax residence.
For the individuals who control the passive non-financial entity, it must specify one or more tax residences and the corresponding TINs.
You must determine the entity’s tax residence under the applicable tax law, including tax treaties. An entity is resident in a state or territory when it pays or should pay taxes there, in particular because of its domicile, residence, place of management, place of incorporation or a similar criterion. The mere fact of receiving income or carrying on an activity there is not sufficient.
In the event of dual residence, you may apply the rules provided for by tax treaties where relevant. For a partnership or similar legal arrangement that does not have a tax residence, residence is attributed to the state or territory where its effective management is located.
How does the financial institution verify the information?
When a new account is opened, the financial institution must obtain a self-certification making it possible to determine one or more tax residences, and then verify its plausibility.
It compares the information declared with that collected when the account was opened, including documents obtained as part of customer identification and anti-money laundering procedures. If the self-certification is not plausible, it must obtain a new valid self-certification.
Where the entity states that it does not have a tax residence address, the financial institution may use the address of its principal place of business to determine its residence.
It may not request the entity’s self-certification when it has information, including publicly available information, establishing with sufficient certainty that the account holder falls within a category provided for by Article 12 of Decree No. 2016-1683. This possibility concerns the identification of the entity’s tax residence.
What happens in the absence of information or in the event of an update?
The entity must provide information relating to the individuals who control it. In the absence of this information, the financial account cannot be opened.
Information relating to the tax residences and TINs of the entity and the individuals who control it must be self-certified again whenever a new self-certification is required, in particular when the information collected must be updated.
Individuals and entities that were already customers of the financial institution on 31 December 2015 and remained customers until the account was opened may benefit from an exemption where the applicable conditions are met.