The United Arab Emirates (UAE) and the United States signed on Saturday an agreement on sharing information about U.S. taxpayers who have finances in the Gulf country, state news agency WAM reported.
Undersecretary of the UAE Ministry of Finance Younis Haji Al Khoori and U.S. Ambassador in Abu Dhabi Barbara A. Leaf inked the deal that is aimed to facilitate the implementation of the U.S. Foreign Account Tax Compliance Act (FATCA) in the Arab country.
The FATCA was enacted by the U.S. Congress in 2010 to target non-compliance by U.S. taxpayers who use foreign accounts. The U.S. law requires foreign financial institutions to provide annual reports on account information of customers who are U.S. citizens, as defined by law.
The UAE was keen to sign this agreement to protect its financial institutions, Al Khoori said.
In case of non-compliance with the requirements of the FATCA, any non-U.S. financial organization could face a 30 percent penalty on certain financial returns of its operations in the U.S. market.
The are over 50,000 U.S. Americans residing in the UAE that has a total population of approximately 9.5 million inhabitants.
Xinhua has learned that all UAE residents with bank accounts in the Gulf state have received in recent months e-mails and SMS from their lenders demanding to fill out a form to declare that they are either U. S citizens or non-U. S. citizens.
For his part, the U.S. diplomat said that the FATCA has become a global standard in the effort to curtail tax evasion.
"This agreement reflects the UAE's commitment to the adoption of best practices as well as the growing strength and breadth of our bilateral relationship," he said.
Under the intergovernmental agreement, the first report, for 2014, must be submitted to the U.S. by September 30, 2015. The agreement exempts certain government institutions, sovereign funds and international organizations from the reporting requirements.