Some quit US
citizenship Concerns push FACTA to
Assembly for approval
KUWAIT CITY, Aug 19: The Cabinet has decided to refer an agreement that it
intends to sign with the US Treasury regarding Foreign Account Tax Compliance
Act (FACTA), to the National Assembly for approval before it is applied because
the agreement will largely impact the aspect of banking confidentiality and
expose American citizens who hold dual citizenship, reports Al-Rai daily.
The American law, which came into effect few months ago, obligates banks and financial institutions to provide American authorities with the required information concerning American citizens and their accounts. This law will assist in exposing Kuwaiti citizens who hold American citizenship when the American authorities ask the banks for information regarding their accounts and transactions.
Earlier, Ministry of Finance had indicated its desire to sign the convention with the US Treasury, which will give Kuwaiti banks the legal opportunity to register with the Internal Revenue Service (IRS) before the deadline of May 5, 2014 in order to avoid the heavy penalties that the American authorities will impose on the banks that do not cooperate with it.
According to the initial convention, the Kuwaiti banks are obligated to ask their clients if they hold American citizenship when they open bank accounts. These banks will then be responsible for the information they give when the American authorities ask about their clients. However, the recent convention, the conditions of which the Ministry of Finance is negotiating, has bigger and riskier obligations such as the banks’ compliance to FACTA in all other countries, which is why the government perceived the need to obtain approval from the National Assembly before signing it. Sources revealed that thousands of people gave up their American citizenship in order to avoid the FACTA law.
The American law, which came into effect few months ago, obligates banks and financial institutions to provide American authorities with the required information concerning American citizens and their accounts. This law will assist in exposing Kuwaiti citizens who hold American citizenship when the American authorities ask the banks for information regarding their accounts and transactions.
Earlier, Ministry of Finance had indicated its desire to sign the convention with the US Treasury, which will give Kuwaiti banks the legal opportunity to register with the Internal Revenue Service (IRS) before the deadline of May 5, 2014 in order to avoid the heavy penalties that the American authorities will impose on the banks that do not cooperate with it.
According to the initial convention, the Kuwaiti banks are obligated to ask their clients if they hold American citizenship when they open bank accounts. These banks will then be responsible for the information they give when the American authorities ask about their clients. However, the recent convention, the conditions of which the Ministry of Finance is negotiating, has bigger and riskier obligations such as the banks’ compliance to FACTA in all other countries, which is why the government perceived the need to obtain approval from the National Assembly before signing it. Sources revealed that thousands of people gave up their American citizenship in order to avoid the FACTA law.
Probably very few will give up their US citizenship. They'll simply ignore it and carry on as usual.
ReplyDeleteDual nationals will fer sure give up their US nationality - especially once they start getting taxed for inheritance and on what they have in the bank - AND they have to file income tax on their salaries coming in or face fines/jail. It gonna get uuuuuugly.
ReplyDelete...and I'm SO GLAD I don't bank with NBK anymore. Woo hoo.
Maybe I should change banks? Contractors working on the base are told to open NBK accounts, that is where their salary will go, we weren't allowed to have it deposited in any other one. I know a Kuwaiti dual citizen who is in the process of giving back his US pp because of this.
ReplyDeleteThe foreign earned income exclusion is $99,200 this year which isn't too bad. Additionally, there are a number of very specific tax laws that pertain to inheritance, stocks, bonds, income producing properties outside the US, etc. And in many cases, as long as the inheritance is left by a non-US citizen to a US citizen but is not income producing and does not make its way into the United States, then tax payments can be avoided all together (a good Tax Lawyer can handle this). Also, those who own stock in foreign businesses which have no affiliation with an American business might also be able to avoid paying taxes on those stocks. Furthermore, the amount which can be present in a bank account at the end of the year (without being taxed) is much higher for a US Citizen who lives and works abroad and does not maintain a home inside the United States. Of course all of those scenarios require a qualified Tax Lawyer. But I don't think people should start stressing and tossing their blue passports in the trash can just yet. It's not as cut and dry as, "You're a US Citizen you're going to pay taxes on every dollar you have earned or have access to".
ReplyDelete