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Wednesday , December 1 2021

Expert sees application of VAT law in ’18-’19 – FATCA requirements explained

KUWAIT CITY, May 2, (KUNA): The Gulf Cooperation Council (GCC) member states are most likely to apply the value-added tax law between 2018 and 2019, an accounting expert said 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 US to file yearly reports on their non-US financial accounts to the Financial Crimes Enforcement Network (FINCEN), Sharif Shawqi, a partner to PricewaterhouseCoopers — Al-Shatti Co, addressed a value-added 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 fi rm 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 Sept 30, he pointed out. On the conference, Shawqi said it primarily aimed at promoting awareness about the impacts of the FATCA on fi nancial 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 US taxpayers using foreign accounts. FATCA requires foreign financial institutions (FFIs) to report to the IRS information about financial accounts held by US taxpayers, or by foreign entities in which US 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.

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