The Kuwait Ministry of Finance (MOF) issued Ministerial Resolution No. (68) of 2016 announcing that Deloitte & Touche, Al-Wazzan & Co. in Kuwait has been certified with the Ministry of Finance for the provision of Foreign Account Tax Compliance services (FATCA).
FATCA is a U.S legislation which aims to combat tax evasion by U.S. persons and certain entities owned by U.S. persons. The intent behind the law is for Foreign Financial Institutions (‘FFIs’)(i.e. non-U.S FI’s) to identify and report any U.S persons that hold assets abroad to the Internal Revenue Service (‘IRS’).
“FATCA is the new reality and going forward non-compliance could result in penalties and the risk of severe reputational damage. A large majority of FFIs in Kuwait are already adhering to the FATCA requirements by complying with the local Intergovernmental Agreement due to the potential commercial, reputational and financial risks (e.g. withholding and regulatory penalties) of non-compliance. It is therefore advised for all financial institutions to become FATCA compliant as soon as possible,” said Nauman Ahmed, Deloitte Middle East tax leader.
“We understand that the implementation of new and complex regulations can be a daunting challenge for many businesses, the first place to start is to understand the level of impact that FATCA will have on your business. The key to any successful regulation implementation program includes developing a strong governance framework that can identify the areas of the business that need changes and remediation and developing appropriate policies and procedures that allow for the transition of new compliance requirements into the business as usual,” Alex Law, Managing Director of Deloitte’s International tax Services.
The main FATCA services that institutions should be emphasizing on at the moment include Entity classification, implementation support, customized training, policy and procedures drafting and reviews, reporting, and complete FATCA reviews and assurance on the Financial Institution’s compliance with the FATCA requirements.
To guide businesses in Kuwait through this local and global tax reform, Deloitte has launched a new report “Doing business guide – understanding Kuwait’s tax position” available on the following link: http://bit.ly/2iZj9Et. “The guide addresses the key tax considerations for doing business in Kuwait, alongside key legal, economic and market drivers which impact clients who are looking to invest in the country, or those who have been present there for some time, but are looking to undertake a review of their tax exposures,” said Ihab Abbas, Partner, Tax, Deloitte & Touche, Al-Wazzan & Co. Kuwait.