More than 40 senior professionals from the financial services industry met here yesterday to discuss the latest developments of the US’ Foreign Account Tax Compliance Act (FATCA) legislation.
Hosted by global audit, tax and advisory firm KPMG, the seminar updated the attendees on the FATCA and the best approach for Qatar.
The seminar was opened by Omar Mahmood, partner, head of financial services, and included presentations from Julio Castro, US tax partner, KPMG (UK), and Rachit Batham, manager (Financial Services) KPMG India.
Last month, the US tax authority - the Internal Revenue Service (IRS) - issued new regulations that would allow any financial institution that is in scope of FATCA to report to its local government, instead of directly to the IRS.
This would be possible if the local government had signed a bilateral inter-governmental agreement (IGA) which facilitates the sharing of information between the US and its counterpart country.
“The requirements for FATCA compliance were recently made more specific,” said Mahmood.
“As a consequence it is in the interests of many businesses to better understand FATCA regulation and its potential local implications.”
To be FATCA compliant, Foreign Financial Institutions (FFIs) can be deemed compliant or have to sign an agreement with the US tax authorities (IRS) to be participating FFIs. Once registered they will identify all US sourced income they receive and pay to US tax payers or non-participating FFIs in their customer base and report certain data to the IRS on a annual basis. This agreement has to be signed between January and June 2013 to be effective from January 2014.
According to KPMG, all affected companies will need to review their business models and products to understand how they will be affected. The seminar highlighted the latest developments on FATCA and the best way forward for Qatar to ensure that it maintains its status as a financial hub.