The Central Bank of Kuwait has instructed local banks, exchange companies and financial institutions to complete and submit their required reports under the Foreign Account Tax Compliance Act (FATCA) and Common Reporting Standard (CRS) by the August 31 deadline set by the Ministry of Finance.
The Central Bank has urged all entities under its supervision to comply with the Ministry of Finance deadline. The entities had previously been granted an additional grace period to complete the technical and operational requirements for preparing CRS reports for 2024 and 2025, until the reactivation of the FATCA and CRS information-exchange system for 2026.
The Central Bank also called for compliance with the Ministry of Finance’s updated technical requirements within the specified deadlines. The measures form part of efforts to combat tax evasion, strengthen tax transparency and protect the credibility of the tax system.
FATCA, enacted by the United States and effective since July 2014, is designed to detect and prevent tax evasion by US citizens and residents who hold investments outside the country through foreign financial institutions.
Kuwait is among the countries that have signed an Intergovernmental Agreement (IGA) with the United States to facilitate FATCA implementation by financial institutions operating in Kuwait.
Under the agreement, Kuwait provides the US Internal Revenue Service with information on relevant US accounts held through financial institutions in the country. The CRS, formally known as the Standard for Automatic Exchange of Financial Account Information, was adopted by the Organisation for Economic Co-operation and Development in July 2014.
Under the CRS, participating countries collect specified information from financial institutions and automatically exchange it annually with other countries. The standard sets out the information to be exchanged, the financial institutions required to report, the types of accounts and tax residents covered, and the customer due-diligence procedures financial institutions must follow.
