This document summarizes a presentation given by Syed W Quadri, CPA on December 23, 2013 from 10am to 12:30pm at the EIBFS Sharjah Campus. The presentation provided an introduction to FATCA for UAE banks and financial institutions, covering key topics such as the US economic metabolism, sources and applications of US dollars, an overview and history of FATCA, FATCA requirements for entities in the UAE, the FATCA registration and reporting process, and consequences of non-compliance. It aimed to increase understanding of FATCA regulations, implementation, and compliance for the UAE financial industry audience.
Transcript: #StandardsGoals for 2024: What’s new for BISAC - Tech Forum 2024
FATCA Implications
1. Date: December 23, 2013
Time: 10am to 12:30pm
Venue: EIBFS Sharjah Campus
Presented By: Syed W Quadri, CPA
2. INRODUCTION
Syed W. Quadri, CPA
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Baruch College, New York, USA
Practicing CPA since 1992
Specialize in US Tax Resolution
Core concentration in FBAR/FATCA Matters
Corporate training and advisory engagements from US Tax perspective
Parallel profile of product development with leading Banks & FIs
Global institutional and individual client base
US Regulatory and Congressional representation
Treaty based US/International tax consulting
UAE, USA and Europe
3. ECONOMIC METABOLISM OF USA
Population, GDP, Budget Deficit…
Stock market collapses, Dot com bubble bursting,
Credit crises, ObamaCare…
SoX, HOPE, HERA, FATCA, Dodd-Frank…
4. USAs $ Earned & Spent
Sources
Business Income Tax
Personal Income Tax
Excise Tax
Trade & Export
Applications
Interest & Loan Servicing
Social Security Disbursement
Health Care
Defense
Infrastructure & Development
10. FATCA ANALYSIS
Cost - Over $25B (implementation)
Time - Over 5-7 years
Efforts - Global
Players - Over 150 Countries, 700,000 Banks & FFIs & 21M US Persons
Outcome - immediate/long term,
tangible/intangible
11. Measures In Effect
Schedule B Disclosure (majority do not answer)
Foreign Bank Account Reporting (FBAR BSA 1970 / USC Title
31/FinCEN is responsible & Amnesty resulted in under 50,000 filings in total)
Global Income Reporting (Yearly Exclusion)
FATCA Filing (Form 8938)
Tax Treaties
12. Pre FATCA Warm Up
Penalized UBS $760M
Closed Vegelin & Company
Prosecuted HSBC India $1.9B
Several more to become public
13. FATCA Life Cycle - Elements
Governments – IGA (Model 1 or 2)
Bank/FFI – Agreements (Model 2)
Government & FFI – Implementation (Model 1 & 2)
Government & FFI – Compliance (Model 1 & 2)
14. What is FATCA
Foreign Account Tax Compliance Act 2010 (F.A.T.C.A.)
FATCA will require Foreign Financial Institutions to report the IRS either
directly OR through their respective Governmental agency, information about
financial accounts held by U.S. taxpayers, or held by foreign entities in which
U.S. taxpayers hold a substantial ownership interest.
Under FATCA, U.S. Taxpayers with specified foreign financial assets that
exceed certain thresholds must report those assets to the IRS. This reporting
will be made on Form 8938 and attached to their federal income tax return.
15. FATCA FINAL REGULATION
(Internal Revenue Service 26 CFR Parts 1 and 301 [TD 9610])
Relating to Information Reporting
by
UAE Banks and Financial Institutions
and
Withholding/Remitting on Certain Payments
to
U.S. Persons, Foreign Financial Institutions & Entities
16. Date: December 23, 2013
Time: 10am to 12:30pm
Venue: EIBFS Sharjah Campus
Presented By: Syed W Quadri, CPA
17. Date: December 23, 2013
Time: 10am to 12:30pm
Venue: EIBFS Sharjah Campus
Presented By: Syed W Quadri, CPA
18. FATCA UPDATE FOR UAE
Implementation & Compliance
Government
Banks, Financial Institutions & Insurance Companies
Preexisting Accounts (individual & entity)
New Accounts (individual & entity)
Time Line
23. FATCA Reporting by UAE Banks
Backup Withholding
(in coordination with section 3406 for recalcitrant US persons)
Traditional 1099 Int/Misc & 1096
(in coordination with chapter 61)
24. FATCA Application - UAE BANKS & FIs
Treatment of Reporting Partner Financial Institution
Suspension of Rules Relating to Recalcitrant Accounts
Specific Treatment of Retirement Plans
Identification & Treatment of Deemed-Compliant FIs
and Exempt Beneficial Owners
Special Rules Regarding Related Entities That Are
Non-Participating Financial Institution
25. FATCA BENEFICIARIES
US Government/Economy (Extremely)
UAE Government (Fairly)
UAE Banks, Financial Institutions & Insurance
Companies (Somewhat)
U.S. Persons & Specified U.S. Persons in the UAE
(Not At All)
26. SUMMARY OF
WHAT IS NEW WITH FATCA?
(UAE FINANCIAL INDUSTRY CENTRIC)
Obtain & Exchange Information - Reportable Accounts
1- Preexisting (individual & entity)
2- New (individual & entity)
Time & Manner of Exchanging Information
Collaboration On Compliance & Enforcement
27. FATCA ID
Each registering Bank, Financial Institution and
Insurance Company in the UAE will be provided a
FATCA ID that will be used for purposes of establishing
and accessing the it’s online FATCA account. For all
applicant entities other than Member FIs, the FATCA ID
is a randomly generated six-character alphanumeric
string. For Member FIs, the FATCA ID will be comprised
of 12 characters: the first 6 characters will be the Lead
FATCA ID, followed by a period, and the last 5 characters
will be alphanumeric and assigned sequentially to each
Member.
28. GLOBAL INTERMEDIARY IDENTIFICATION NUMBER
(GIIN)
In response to submitting Form 8957 registering Banks,
Financial Institutions and Insurance Companies in the
UAE will receive a notice of registration acceptance and
will be issued a global intermediary identification
number (GIIN). The IRS will electronically post the first
IRS FFI List by June 2, 2014 and will update the list on a
monthly basis thereafter. To ensure inclusion in the June
2014 IRS List, an entity will need to finalize its
registration by April 25, 2014.