UAE signs FATCA deal with the US to provide tax details of American citizens

The tax details of American citizens with accounts in the UAE will be shared with US authorities under a deal signed to implement the Foreign Account Tax Compliance Act (FATCA).

FATCA is US legislation that was signed into law in 2010 with the main aim being to identify US citizens, or foreign companies with one or more US shareholders owning more than 10%, who may be evading tax by using foreign accounts.

Under the FATCA agreement, UAE financial institutions will be required to submit annual reports detailing the account information of US citizens. Financial institutions that don’t comply may face a 30% penalty on certain financial returns of operations in the US market.

The UAE’s first FATCA reports covering 2014 will be submitted to the US Treasury Department by 30 September 2015. Under the agreement, certain government institutions, sovereign funds and international organisations will be exempt from reporting requirements.

Managing Director of TMF Group Dubai Julian Dietz said: “The Foreign Account Tax Compliance Act (FATCA,) was introduced and applied by banks and international companies including TMF Group over the past five years, since FATCA was made law in the US in March 2010.

“With deadlines now in place and strict regulations now formalised by the UAE government, companies compliance requirements may increase, particularly if they are dealing with the US on a regular basis.

“Although TMF Group is not able to offer advice in relation to FATCA, we would be happy to assist in engaging proper advisors in this respect for Americans with accounts in the UAE.”

Read more about TMF Group services in the UAE and get in touch with our expert team.

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