Kuwait has signed the Foreign Account Tax Compliance Act (FATCA) agreement with the US to fight international tax evasion, Kuwait News Agency (KUNA) reported.
Under the agreement, Kuwait financial institutions will provide their central authority with details of US account-holders, which will be passed on to the US Internal Revenue Service (IRS).
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US citizens owning $50,000 or more in their bank accounts and US firms owning $250,000 or more in bank accounts in Kuwait will have their finances reported to the IRS by the Kuwaiti banks holding these accounts, said Kuwait undersecretary of the Ministry of Finance Khalifa Hamada, citing the requirements of FATCA.
As per the FATCA law, failure by an FFI to disclose information on their US clients, including account ownership, balances and amounts moving in and out of the accounts, will result in a requirement to withhold 30% tax on payments of US-sourced income.
For the year 2014, Kuwait will have to send information about accounts of US citizens held by Kuwaiti financial institutions by next September.
According to Hamada, 212 of the financial institutions have already registered with the IRS on the latter’s website as per directions of the FATCA agreement.
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