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New US tax laws for expats to be studied.

MANAMA: Changes in the recently announced US tax laws covering expatriate financial transactions will be scrutinised by financial institutions in Bahrain.

The US Department of the Treasury and the Internal Revenue Service issued comprehensive final regulations for implementing the information reporting and withholding tax provisions commonly known as the Foreign Account Tax Compliance Act (FATCA).

FATCA will affect almost all financial institutions and other entities in Bahrain with exposure to US taxpayers and other financial inter-bank transactions.

FATCA was framed to address instances of tax evasion by US persons who invest money aboard through offshore accounts maintained outside the territory of the US.

Financial institutions that agree to participate in the programme are required to identify US persons who hold accounts with the institution and report specified information about US persons to US tax authorities.

In case an account holder fails to provide required information to the financial institution, they will be identified as recalcitrant and a withholding of 30 per cent will be applied on US source income and certain payments due to the account holder.

The final regulation takes into consideration feedback from governments, financial institutions and industry bodies from across the world and these regulations.

To date, more than 50 countries are in discussion with US authorities for implementing FATCA through bilateral agreements.

"FATCA regulations will require financial sector institutions that do business with US ownership and individuals who are identified as US persons under FATCA to review and update their customer information framework to comply with the FATCA requirements," said Bahrain-based professional business services provider Keypoint managing director Wajdi Al Jallad.

"Keypoint has set up a specialised team for FATCA compliance led by Ranjith Kumar.

"Our team consists of resources with experience in business services domain and we will be working with partners with expertise in technology, tax and legal domain to provide a comprehensive solution to FATCA requirements for institutions in the Middle East and North Africa region."

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Publication:Gulf Daily News (Manama, Bahrain)
Geographic Code:7BAHR
Date:Feb 15, 2013
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