Abu Dhabi: The UAE’s financial institutes are set to comply with the US’s Foreign Account Tax Compliance Act (Fatca) before the deadline at the end of the second quarter of this year, officials confirmed on Sunday.
The information will then be passed on to the US’s Internal Revenue Services (IRS) in September 2015.
At a press conference in Abu Dhabi on Sunday, officials said the UAE’s Ministry of Foreign Affairs will coordinate with its American counterpart to ensure all the statements are sent.
The Central Bank has already issued a notice to the country’s financial institutes obliging them to submit financial statements on their American customers.
According to the US law, American citizens living around the world with at least $50,000 (Dh183,657) in their bank accounts are subjected to US income tax. The Act — issued in 2010 — requires banks globally to disclose financial statements of Americans with such accounts, and the UAE’s banks have already started looking into the customers’ accounts.
The act also mandates financial institutions around the world to submit annual reports on their customers who are required to comply.
Saeed Al Hamiz, assistant governor for banking supervision at the UAE’s Central Bank, said that there were positive results regarding the banks’ readiness to send information to the IRS.
US citizens who work at the Dubai International Financial Centre, a free-trade zone, will also have to comply with the act, and will be subjected to the same due diligence process, Michael Ridgeway, general counsel at DIFC, confirmed.
The UAE issued a notice this January mandating banks to finalise their statements on American citizens (including those with dual citizenships), and expects to have the statements ready before the May 31 deadline.
US citizens who hold more than 10 per cent of shares in a company also fall under the umbrella of the Fatca.
Financial institutions that fail to submit such data will be faced with a penalty of having 30 per cent of total financial returns of operations in the US market cut.
