What is FATCA?

FATCA stands for Foreign Accounts Tax Compliance Act which was enacted by the
United States to provide its Internal Revenue Service (IRS) with an increased ability to
monitor U.S. persons use of financial accounts with Foreign Financial Institutions
(FFIs), i.e. accounts outside the U.S.

What is the impact of FATCA?

Sun Life will be required to identify and report financial accounts held by U.S. persons
or foreign entities in which U.S. persons hold an interest.

How Foreign Financial Institutions (FFIs) like Sun Life will comply with FATCA will
depend on whether the business is in:
Countries without Inter-Governmental Agreements (IGA) with the U.S: Sun
Life will report directly to the IRS.
Countries with a Model 1 IGA: Sun Life will comply under local legislation and
report to their local tax authorities.
Countries with a Model 2 IGA: Sun Life will report directly to the IRS.

Please note that most global financial institutions will be affected by FATCA, not just
Sun Life.

What is Sun Lifes position vis--vis FATCA?

Sun Life is assessing the impact of the FATCA regulations on our business. Sun Life is
participating in various FATCA industry working groups in Canada, U.S., Hong Kong,
Indonesia, and the Philippines to address issues related to the implementation of
FATCA. Sun Life is committed to honoring the privacy of all personal information
provided to us and complying with all applicable laws.

Is Sun Life going to be a participating foreign financial institution (PFFI)?

Corporate Compliance is leading the implementation of FATCA in partnership

with Corporate Tax. We are working towards becoming a PFFI where
permitted by local law.
Sun Life remains committed to honoring the privacy of all personal
information provided to us and to complying with all applicable laws.

How will FATCA affect Sun Lifes profitability?

 Sun Life Financial Philippines 2
FATCA FAQs

Sun Life is assessing the impact that the FATCA regulation on its business.

What are the consequences of not complying with FATCA?

A 30% U.S. withholding tax may be imposed against certain payments due to the
offending FFI.
Non-compliance may also result in some reputational risks.

How prepared is Sun Life to deal with the operational changes needed under
FATCA?

Corporate Compliance is leading the implementation of FATCA in partnership with

Corporate Tax. We are working towards addressing the following key requirements:
Identification and reporting of new U.S. accounts i.e. accounts opened after June
30, 2014;
Identification and reporting of pre-existing U.S. accounts , I.e. certain accounts
opened on or before June 30, 2014;
Withholding and reporting of U.S. accounts and recalcitrant accounts.
Recalcitrant accounts refer to accounts held by persons who cannot be
properly documented as non-US persons.

SLF Asia Business Units have been reviewing the final FATCA regulations since their
release and revising the business requirements and compliance plans across Asia.

What is a definition of a U.S. person?

U.S. persons include:

A citizen of the U.S.
A lawful resident of the U.S. (including green card holder)
Certain persons residing in the U.S.
U.S. corporations, estate and trusts.

What is considered indicia of US status?

The following are considered indicia of US status:

US Citizenship or permanent resident status (green card)
US birthplace
US residence/ mailing address or US phone number
A standing instruction to transfer funds to an account maintained in the US
A Power of Attorney granted to a person with a US address.

*Having one of the indicia does not mean that the account is owned by a US person.

Does FATCA apply to life insurance policies and pension?

 Sun Life Financial Philippines 3
FATCA FAQs

Yes, FATCA applies to financial accounts, which includes life policies and pension
products with cash values.

My customer is not a U.S. person. What does FATCA mean for him/her?

In most cases, FATCA should have little impact on non-US persons. Sun Life may ask
certain customers to provide additional information or documentation to demonstrate
that he or she is not a U.S. person. Sun Life will communicate as necessary with
affected clients as soon as possible.

My customer is a U.S. person. What does FATCA mean to him/her?

If your customer is a U.S. person, he/she may be asked to complete IRS Form W-9
(request for Taxpayer identification Number and Certificate) . Information about the
customer will be reported to the IRS or the local tax authority on an annual basis.

If an IRS Form W-9 is not completed, a tax of 30% may need to be withheld against all
U.S-sourced payments due to your customer.

My customer has US indicia. What documents should I collect with the

application form?

The document/s to be submitted with the application form will depend on whether the
customer confirms or disputes his/her US status.

US Indicia Dispute US Status Confirm US Status

(those submitted to IRS)
US Not applicable W-9
Citizenship/ (Request for TIN &
Green Card Certificate)
US birthplace W8 and reasonable written W-9
explanation as to why citizenship
not obtained at birth; or
Copy of the policy owners
Certificate of Loss of Nationality of
the US
US address or W-8 W-9
phone
number
Standing W-8 W-9
instructions to
US
 Sun Life Financial Philippines 4
FATCA FAQs

Power of W-8 W-9

attorney with
US address
W8 must be renewed upon expiry, while the W9 does not expire, and unless there is a
change of circumstances, need not be renewed.

My customer who has US indicia does not want to comply with the required
documentation for FATCA. What will happen to his/ her application?

FATCA-related documents, such as the W8 and W9 forms, are considered UW

requirements. If these documents are not submitted, the application will be closed as
Not Proceeded With (NPW), and we will refund the premium deposit paid with the
application.

For existing US accounts, what will happen if client will not give us the required
documentation needed for FATCA?

Generally, any existing client whose account is at least $250,000 (life insurance plans)
and $50,000 (mutual funds) that does not comply will be tagged as Recalcitrant and will
be subject to 30% withholding their US sourced income from Sun Life.

Pre-existing accounts are policies issued prior to July 1, 2014 and those who reach the
threshold.

Does FATCA comply with privacy legislation?

At Sun Life, we take customer privacy very seriously. We are committed to honoring
the privacy of all personal information provided to us in compliance with all applicable
laws. We are carefully reviewing the FATCA regulations to assess their implications on
customers.

Are other financial institutions complying with FATCA?

Financial Institutions around the globe are impacted by FATCA. Sun Life is not able to
comment on steps that other institutions are taking.

How can I help a customer with questions on FATCA on their account?

Customers are encouraged to seek advice on FATCA from legal and/or professional
advisors as appropriate.
Employees are prohibited from giving tax advice.
More information on FATCA is available:
- The IRS website: http://www.irs.gov/FATCA