UAE: FATCA Reporting Deadline Set
The Ministry of Finance of the United Arab Emirates (UAE) announced that the Foreign Account Tax Compliance Act (FATCA) reporting deadline is set on 30 July 2015.
In addition, on 6 July 2015, the Ministry of Finance issued the first set of guidance notes for implementing the FATCA Agreement.
The FATCA Agreement between UAE and the United States was signed on 17 June 2015.
FATCA seeks to obtain information on accounts held by U.S. taxpayers in other countries. It requires U.S. financial institutions to withhold a portion of certain payments made to Foreign Financial Institutions (FFIs) who do not agree to identify and report information on U.S. account holders. Governments have the option of permitting their FFIs to enter into agreements directly with the IRS to comply with FATCA under U.S. Treasury Regulations or to implement FATCA by entering into one of two alternative Model IGAs with the United States.
More specifically, UAE and the United States signed a Model 1 Agreement. Under this agreement, FFIs in the UAE will report the information required under FATCA about U.S. accounts to the UAE Government, which in turn will report the information to the IRS. This agreement is reciprocal, meaning that the United States will also provide similar tax information to the UAE Government regarding individuals and entities from the UAE with accounts in the United States.
