This is to alert you that the U.S. has recently introduced legislation that may subject non-U.S. investment funds with U.S. investors to stringent U.S. compliance and/or reporting requirements. The Foreign Account Tax Compliance Act (FATCA) could affect both public and private investment funds, including buyout, venture capital, property and hedge funds. Unless these funds specifically identify and disclose information about their U.S. investors to the IRS, income derived from, or proceeds from the sale of, certain U.S. assets owned by such funds may become subject to 30% U.S. withholding tax from 2013. Also, funds without US investors may be affected by this legislation if they invest in certain U.S. assets.
How exactly Dutch funds will be affected remains unclear because a significant part of the legislation still needs to be implemented through regulations from the U.S. Treasury Department and the IRS. For example, it is anticipated that the U.S. Treasury will publish regulations exempting certain publicly traded investment funds from these requirements.
The new legislation should be taken into account when deciding to accept a U.S. person as an investor. In anticipation of the implementation of the FATCA, fund managers could consider reviewing their fund documents to establish whether these allow for information to be collected from investors and to be provided to the IRS.