The Gulf Cooperation Council (GCC) member states are most likely to apply the added-value tax law between 2018 and 2019, expected an accounting expert on Monday.
Kuwait, for example, issued a ministerial decree in 2015 obliging financial companies and institutions to stick to the Foreign Account Tax Compliance Act (FATCA) which enforces US persons including those living outside the U.S. to file yearly reports on their non-U.S. financial accounts to the Financial Crimes Enforcement Network (FINCEN), Sharif Shawqi, a partner to PricewaterhouseCoopers - Al-Shatti & Co., addressed an added-value tax conference.
Banks, financial institutions and investment firms which are subject to the FATCA are required to file their reports in the current quarter, or the second quarter at most, he said.
He elaborated that such reports have to be approved by an accredited audit firm and include institutions' rating by an accredited auditor and registration with the US Internal Revenue Service.
Financial institutions and banks have to issue annual certificates and send a relevant notice to the Ministry of Finance before September 30, he pointed out.
On the conference, Shawqi said it primarily aimed at promoting awareness about the impacts of the FATCA on financial institutions and banks operating in Kuwait.
The conference was organized by the PricewaterhouseCoopers - Al-Shatti & Co. at the headquarters of the Kuwait Chamber of Commerce and Industry.
FATCA was enacted in 2010 by Congress to target non-compliance by U.S. taxpayers using foreign accounts. FATCA requires foreign financial institutions (FFIs) to report to the IRS information about financial accounts held by U.S. taxpayers, or by foreign entities in which U.S. taxpayers hold a substantial ownership interest.
FFIs are encouraged to either directly register with the IRS to comply with the FATCA regulations (and FFI agreement, if applicable) or comply with the FATCA Intergovernmental Agreements (IGA) treated as in effect in their jurisdictions.