Application of Fatca on financial institutions in the UAE

Application of Fatca on financial institutions in the UAE

Usually, depository institutions like banks, custodial institutions like mutual funds, investment entities like hedge funds or private equity funds, and certain types of insurance companies that have cash value products or annuities are required to comply with the Fatca

Once considered as deemed-compliant or exempt, there would not be too much hassle of work which will reduce cost and will have less burden on the team. — File photo

By Mahar Afzal/Compliance Corner Published: Sun 27 Mar 2022, 3:20 PM

In our previous article, we discussed that the Foreign Account Tax Compliance Act (Fatca) was introduced by the United States (US) in 2010 to curb tax evasion. Unless exempt and deemed compliant, Foreign Financial Institutions (FFIs) are required to report information about financial accounts held either by the specified US person or Non-Financial Foreign Entities (NFFEs) in which specified US persons have a substantial ownership interest.

Usually, depository institutions like banks, custodial institutions like mutual funds, investment entities like hedge funds or private equity funds, and certain types of insurance companies that have cash value products or annuities are required to comply with the Fatca.

To implement Fatca effectively, the US has signed Intergovernmental Agreements (IGA) with the UAE (US-UAE IGA) in 2015 and 112