Definition:
Foreign Account Tax Compliance Act (FATCA) Reporting generally refers to two types of reporting. Withholding agents are required to report withholdable payments to which chapter 4 withholding was applied, or should have been applied, on Form 1042-S, Foreign Person’s U.S. Source Income Subject to Withholding and file a tax return on Form 1042, Annual Withholding Tax Return for U.S. Source Income of Foreign Persons, to report those payments.
Withholding agents may also be required to report on Form 8966, FATCA Report , or the local equivalent required by the tax authorities of another country. These are called FATCA Reports and include information about the accounts of U.S. persons maintained by participating financial institutions located outside of the United States.