August 31 Deadline for Banks and Money Exchange Companies to Report Americans for Tax Purposes
The Central Bank of Kuwait has directed all local banks, exchange companies, and financing companies regarding reporting and disclosure requirements under the Foreign Account Tax Compliance Act (FATCA) and the Common Reporting Standard (CRS), urging them to take necessary steps to complete and submit the required reports within the deadline set by the Ministry of Finance, which is August 31 of this year.
In accordance with directives from the Ministry of Finance, entities under the supervision of the Central Bank have been reminded of the necessity to adhere to the specified deadline, taking into account that the Ministry had previously granted an extension to the entities covered by these agreements to complete the technical and operational requirements related to preparing CRS reports for the years 2024 and 2025, up to the scheduled date for reactivating the information exchange system for FATCA and CRS for 2026. The Ministry has also emphasized compliance with updated technical requirements within the deadlines set by the Ministry of Finance, as part of efforts to combat tax evasion, enhance tax transparency, and safeguard the credibility of the tax system.
It is worth noting that the U.S. Foreign Account Tax Compliance Act (FATCA) was enacted by the United States of America and entered into force in July 2014.
This law aims to detect, prevent, and thwart tax evasion abroad by U.S. citizens or residents who invest directly or indirectly outside the United States through foreign financial institutions.
Several countries, including Kuwait, have signed an Intergovernmental Agreement (IGA) with the United States to facilitate the implementation of FATCA provisions by financial institutions within their respective jurisdictions.
Under this agreement, Kuwait commits to reporting to the U.S. Internal Revenue Service (IRS) information concerning U.S. accounts held at relevant financial institutions in Kuwait.
The Common Reporting Standard (CRS), officially known as the Automatic Exchange of Financial Account Information Standard, was adopted by the Organisation for Economic Co-operation and Development (OECD) in July 2014. Under this standard, countries are required to collect certain information from their financial institutions and automatically exchange such information annually with other participating countries.
The CRS specifies the types of information to be exchanged, the financial institutions required to report, various categories of accounts and tax-resident individuals, as well as the customer due diligence procedures that financial institutions must follow.
