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KUWAIT CITY, Nov 20: Bankers around the world disclosed there is an international trend to globalize the Foreign Account Tax Compliance Act (FATCA) on foreign accounts of the Americans under the name Global Account Tax Compliance Act (GATCA), so most countries in the world, including Kuwait, can apply it on the income and investments of their citizens overseas, reports Al-Anba daily.
GATCA cannot nullify FATCA but extends it in a manner that there will be automatic exchange of information at world level and the Europeans will be able to control the application of the law. According to banking sources, the European Union countries, notably France, Britain, Germany, Spain, Italy and Portugal, are steadily preparing for the implementation of the GATCA, which has gone a long way in stopping the tax evasion of citizens of these countries abroad. According to sources, Europeans have put forward an agreement with Kuwait on this issue, similar to the US FATCA — indicating about 16,000 Europeans in Kuwait will be subjected to this law, according to the Public Authority for Civil Information.
The sources added this will add a burden on the Kuwaiti banks when GATCA comes into force by 2020. This will be a new challenge facing the banks in achieving their goals in terms of increasing the customer base and increasing the number of bank accounts, which is one of the main obstacles of achieving financial coverage in the banking sector.
The new agreement also removes fears of banks that this trend will be a reason for the decline in deposits or savings of residents in Kuwait who hold the European citizenship. The sources stressed it is inevitable that Kuwait sign this agreement with the European countries because this is an international trend applicable to most countries and shall be made mandatory not optional. The sources indicated in the event of non-compliance, violating nations will be included on the list of noncooperative countries of the Economic Cooperation Organization.
According to the Eurostat Office, EU-Kuwait trade volume was 4.97 billion euros ($5.76 billion) in the first six months of 2017. Eurostat said in a recent report that EU imports from Kuwait amounted to 2.15 billion euros ($2.49 billion) in the first half of 2017, while exports for the same period amounted to 2.82 billion euros ($3.27 billion).