Kuwait has sought to join the list of states signing the FATCA agreement out of its commitment to fight international tax evasion and to exchange tax data with other nations, said Khalifa Hamada, Undersecretary of the Ministry of Finance on Wednesday.
Hamada was speaking to reporters on the sideline of having signed the FATCA agreement, noting that according to the agreement Kuwait was obligated to instruct its financial institutions (banks, investment firms, financial houses, insurance companies) to report to the US Internal Revenue Service (IRS) contents of money accounts held by American citizens in Kuwait for purposes of US tax compliance.
US citizens owning $50,000 or more in their bank accounts and US firms owning $250,000 or more in such accounts in Kuwait will have their finances reported to the IRS by the Kuwaiti banks holding these accounts, said Hamada, citing the requirements of FATCA. For the year 2014, Kuwait must send information about accounts of US citizens held by Kuwaiti financial institutions by next September, he said adding that already 212 of these institutions have registered with the IRS on the latter’s website as per directions of the FATCA agreement.
Up to 37 more will have registered by May, he said. He further said that the ministry of finance had suggested the formation a committee with membership from the ministry of foreign affairs, the central bank, the ministry of trade and commerce, the Kuwaiti union of banks, and the capital markets authority to follow up all that was necessary to conclude the signing of the FATCA agreement and to keep it in effect without any ruffles.
Signing from the US side today on the agreement was the US ambassador to Kuwait Douglas Silliman who indicated that signing it enabled the two countries to become part of a cohesive international financial system that helped in preventing tax evasions and violations. FATCA is a US law which requires world banks and financial institutions to send to the US Treasury information about accounts they hold that belong to US citizens whose income earnings exceed $50,000 in any given year. Banks that do not supply that information will be exposed to penalties. FATCA applies to banks, financial firms, and insurance companies.