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Talk on tax law changes for US expats today

The event will cover a variety of topics, including eligibility for foreign earned income and foreign housing exclusions.

Dubai — The American Chamber, Abu Dhabi, will host an event on Tuesday to help educate US expatriates about recent tax law changes that could affect tens of thousands of American residents of the GCC.

The event — which will include tax experts from PricewaterhouseCoopers — will cover a variety of topics, including eligibility for foreign earned income and foreign housing exclusions.

Among the most important recent tax issues to be discussed is the Foreign Account Compliance Act – or Fatca – which came into effect in the UAE on July 1, 2014.

Fatca requires that foreign financial institutions provide the names, addresses and tax ID number of American citizens, as well as account numbers, year-end balance and gross receipts, withdrawals and payment information from each account. The law applies both to individuals and to companies in which US citizens own more than a 10 per cent share.

In 2013, the United States Congress Joint Committee on Taxation estimated that Fatca could potentially raise an extra $792 million in tax revenue each year. The UAE has already agreed to comply with the law, and the UAE Ministry of Finance and several other local authorities have prepared procedures to comply.

Sharief Fahmy of AmCham – Abu Dhabi’s US-UAE Public Affairs Committee, said the American Chamber is working hard to educate overseas Americans about tax changes, which apply to them all.

“Fatca affects everyone. All American expats have to adhere to Fatca,” he said. “Our role is to help educate.” “We are constantly trying to keep a pulse of Washington DC and educate each other.”

Fahmy notes that, in general, banking has become much more difficult for Americans living abroad, but that tax flight from U.S. citizens is not expected.

“It’s not a concern. But banking has become much more restrictive for Americans,” he said, adding that “there has been a big push right now to repeal Fatca” in favour of residence-based taxation such as that which is applied in other OECD countries.

The UAE will begin to report financial data to the US Internal Revenue Service in September 2015.

Economic relations between the US and the UAE are extremely strong. In 2013, UAE-US trade reached $26.9 billion, and over 60,000 Americans live and work in the UAE. More than 1,000 American countries are based here, many of them using the country as the regional headquarters for their operations.

bernd@khaleejtimes.com

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