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UAE expats in line for new global FATCA
| Published: | 14 Dec at 6 PM |
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Following the introduction of new international measures to stop expat tax evasion, banking secrecy for expat clients is about to become a thing of the past.
International bank HSBC has issued a notice stating the impending collection of account-holder information related to tax matters, making global transparency a major tool in fighting cross-border tax evasion by expats. The costs to America alone of offshore tax abuse are estimated at some £100 billion every year.
The new rules come under the name of the Common Reporting Standard (CRS), and are being referred to as a ‘global FATCA’. The brainchild of the Overseas Economic Cooperation and Development (OECD) office, the measures will apply to the EU, UAE, India, Indonesia, Canada, the Lebanon, Mexico, Turkey and a number of other states. Under investigation will be individual accounts as well as dividends, interest and other incomes earned outside expats’ countries of origin.
Collection of formerly private information is expected to begin early next year with all involved banks and financial institutions being forced to ask their clients for information as to their home country tax status. At present, it seems unclear exactly what proof will be required from customers of banks and financial firms, but national insurance numbers, taxpayer IDs and social security numbers are in the frame. Double trouble will hit US expats already under FATCA, with extra information sure to be required as CRS is a new, different scheme.
The new regulation’s impact may be felt differently according to the type of bank accounts and investments held, the location of expats, whether a business is being operated and other as yet undisclosed circumstances. HSBC’s website is doing its best to seem reassuring, with comments including ‘don’t worry, we’ll let you known what you have to provide if we find you are tax-resident in your home country’. Just maybe, such reassurance may soon have a hollow ring for expats in the UAE and elsewhere.
International bank HSBC has issued a notice stating the impending collection of account-holder information related to tax matters, making global transparency a major tool in fighting cross-border tax evasion by expats. The costs to America alone of offshore tax abuse are estimated at some £100 billion every year.
The new rules come under the name of the Common Reporting Standard (CRS), and are being referred to as a ‘global FATCA’. The brainchild of the Overseas Economic Cooperation and Development (OECD) office, the measures will apply to the EU, UAE, India, Indonesia, Canada, the Lebanon, Mexico, Turkey and a number of other states. Under investigation will be individual accounts as well as dividends, interest and other incomes earned outside expats’ countries of origin.
Collection of formerly private information is expected to begin early next year with all involved banks and financial institutions being forced to ask their clients for information as to their home country tax status. At present, it seems unclear exactly what proof will be required from customers of banks and financial firms, but national insurance numbers, taxpayer IDs and social security numbers are in the frame. Double trouble will hit US expats already under FATCA, with extra information sure to be required as CRS is a new, different scheme.
The new regulation’s impact may be felt differently according to the type of bank accounts and investments held, the location of expats, whether a business is being operated and other as yet undisclosed circumstances. HSBC’s website is doing its best to seem reassuring, with comments including ‘don’t worry, we’ll let you known what you have to provide if we find you are tax-resident in your home country’. Just maybe, such reassurance may soon have a hollow ring for expats in the UAE and elsewhere.
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