Foreign Account Tax Compliance Act (FATCA)

In 2010, the United States enacted FATCA to increase income tax reporting by US taxpayers on assets held in offshore accounts and through “Non-US Entities”. FATCA imposes new reporting and withholding obligations on foreign financial institutions and certain other foreign persons which must be complied with in order to avoid a 30 percent US withholding tax on certain US-source payments and “passthru” payments that such non-US persons receive.

Key points:

1. All relevant DIFC entities are required to report annually, as per the Ministry of Finance (“MOF”)  requirements mid-year, via the MOF Portal in relation to both CRS and FATCA.
2. DIFC Registrar of Companies has issued Guidance on DIFC CRS, explaining obligations, which entity types are or may be considered RFIs and how the overall DIFC CRS aligns with international standards set by the OECD.
3. While it is each of the DIFC entity’s responsibility to determine and action their obligations under DIFC CRS in order to ensure compliance.

For clarification on this matter, you may reach us and we shall be happy to extend support.