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- 2. What is FATCA?
US governments response to combatting tax evasion
g
p
g
US government concern
• US persons evade their tax obligations by holding assets overseas in non‐US structures & products
• US persons do not file or report their worldwide income with integrity
US persons do not file or report their worldwide income with integrity
US government response
• N US fi
Non‐US financial institutions designated Foreign Financial Institutions, or “FFIs” need to enter
i l i tit ti
d i t d F i Fi
i l I tit ti
“FFI ”
dt
t
into an agreement with the US Tax authorities and become participating FFIs
Foreign Financial Institutions
Income and sales
proceeds
Bank
account
Wealth
manager
US assets
Fund
Trust/
Custodian
Platform
Broker
Insurance
product
US owner
• All participating FFIs need to report to the US Tax authorities: the balance the income and the
All participating FFIs need to report to the US Tax authorities: the balance, the income and the
gross proceeds for all accounts held by US persons, on an annual basis
© 2013 Deloitte LLP. Private and confidential
2
- 10. Inter‐Governmental Agreements
Between Pakistan Government and the US (IRS)
( )
Challenges for Banks/Financial Entities
Benefits to Banks/Financial Entities
Local government provides a level of protection to the
Local government provides a level of protection to the
financial industry from the US
•
Potential for Financial entities to be exempted.
•
FATCA requirement changes introduced by IGA
Removal of withholding
•
Uncertainty waiting for local government
Uncertainty waiting for local government
Assistance provided to the industry regarding specific
concerns (e.g. Banking Secrecy)
•
•
•
•
Reduced exposure of local entities to direct US action
(fines, reviews, audits).
10
© 2013 Deloitte LLP. Private and confidential
- 12. Inter‐Governmental Agreement – GCC region snapshot
As at October 2013
Country
Regulator
Banking Secrecy
Discussions / Communications
High degree of Banking Secrecy for all
Hi h d
f B ki S
f
ll
banking customers
• CBB issued a circular in September, announcing their intention to enter
CBB issued a circular in September, announcing their intention to enter
into a Model 1 IGA with the US
• CBB asked Bahrain institutions to provide update of their FATCA readiness
Regulated financial institutions must
protect confidential information relating
to their clients.
• QCB issued a circular in September, announcing their intention to enter
into a Model 1 IGA with the US
• QBB asked Qatar institutions to provide update of their FATCA readiness.
Central Bank of
the BUAE (CBUAE)
Bank secrecy is strictly enforced in the
UAE, although customer consent may
dis‐apply it.
• At a FATCA Seminar in March, the UAE Central Bank governor verbally
announced the UAE government’s intention to enter into a Model 1 IGA
with the US
• No further formal announcements have been made to date
Saudi Arabia
Monetary Agency
(SAMA)
A bank has a general duty of
g
y
confidentiality towards a consumer
except when disclosure is imposed by a
relevant authority or with the written
consent of the consumer.
• SAMA has instructed Saudi banks to undertake their respective FATCA
compliance initiatives whilst SAMA assesses the possibilities of entering
into an IGA with the US
Oman
Central Bank of
Oman (CBO)
CBO Committee reviews requests to
release confidential information and
barring this , consent is always required
from the account holder prior to
divulging information to third parties.
• CBO issued a FATCA circular requesting financial institutions to assess the
potential implications FATCA has on their respective operations
• No announcements in relation to an IGA have been made to date
Kuwait
Central Bank of
Kuwait (CBK)
Affairs of the bank or its customers are
specifically protected under the Civil
and Commercial Procedure Law.
• CBK has not issued any specific guidelines on FATCA
• The Kuwait Bankers association has conducted internal FATCA discussions
discussions,
however no announcement in relation to an IGA have been made to date
Bahrain
Qatar
U.A.E.
Saudi
Arabia
Central Bank of
C
lB k f
Bahrain (CBB)
Qatar Central
Bank
12
© 2013 Deloitte LLP. Private and confidential
- 13. Rest of the world … Some examples
As at October 2013
Country
Regulator
Banking Secrecy
Discussions / Communications
India
Reserve Bank of
India
Regulated financial institutions must
R l d fi
i li i i
protect confidential information relating
to their clients.
• The US Treasury reported on November 2012 that the US and India were
The US Treasury reported on November 2012 that the US and India were
working to explore options for intergovernmental engagement.
• No further public announcements and information has been provided in
2013
Malaysia
Bank Negara
Malaysia –
Central Bank of
Malaysia
Bank secrecy is strictly enforced in
Malaysia, although customer consent
Malaysia although customer consent
may dis‐apply it.
• The US Treasury reported on November 2012 that the US and Malaysia
were working to explore options for intergovernmental engagement.
• No further public announcements and information has been provided in
2013
Taiwan
Central Bank of
the Republic of
(
)
China (Taiwan)
Banks are required to keep customer
information confidential unless
otherwise required by law.
q
y
• On April 2013, the Taiwanese Financial Supervisory Commission and
Ministry of Finance jointly announced that both agencies and the US
Treasury had reached a consensus to pursue an IGA to facilitate the
implementation of FATCA.
i l
t ti
f FATCA
Národná Banka
Slovenska
A bank has a general duty to maintain a
customers confidential information and
protect it against disclosure except
when it is imposed by a relevant
authority or with the written consent of
authority or with the written consent of
the consumer.
• The US Treasury reported on November 2012 that the US and Slovak
Republic were actively engaged in a dialogue towards concluding an IGA.
• No further public announcements and information has been provided in
2013
Slovak
Republic
13
© 2013 Deloitte LLP. Private and confidential
- 18. Our Engagement team
Focused on providing value added input
F
d
idi
l
dd d i
t
Ali Kazimi – FATCA Leader and Financial Services Partner
Ali has over 20 years of financial services sector experience gained with leading
financial institutions and professional advisory firms, including eight years as the
financial institutions and professional advisory firms, including eight years as the
Head of Taxation at Barclays Global Investors. He has more recently focused on
advising on the implications of FATCA.
He works primarily with institutional investors, asset and wealth managers,
investment brokerage and platforms, and investment services firms. Ali is a frequent
speaker at conferences and has also written on wide range of topics including
speaker at conferences and has also written on wide range of topics including
Securities Lending, Sovereign Fund Investing, Pension & Asset Pooling, Multi‐Manager
Investing, Custodial Structures, and Stamp & Transfer Taxes.
• E‐mail: alikazimi@DELOITTE.com
• Tel: 00971 45064910
Mark Pegram – FATCA Co‐Lead Tax
Mark is a Deloitte FATCA co‐leader and has over 9 years tax experience, the last three
years with Deloitte in Guernsey, the Isle of Man and now Dubai.
Earlier in his career Mark worked for the UK tax authority (HMRC) as an Inspector of
Taxes, and provides an insight into the tax authorities perspective to our FATCA
projects.
• E‐mail: mapegram@DELOITTE.com
• Tel: 00971 45064902
Over the years he has worked on a number of projects for financial institutions based
Over the years he has worked on a number of projects for financial institutions based
in Guernsey and the Isle of Man in respect of withholding taxes and reporting
requirements.
18
© 2013 Deloitte LLP. Private and confidential
- 19. Important Notice
This document, which has been prepared by Deloitte LLP (“Deloitte”), has been prepared for the sole purpose of providing a presentation and overview of certain FATCA issues. The contents of this
presentations is for information only, should not be relied upon and does not constitute formal advice.
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© 2013 Deloitte LLP. Private and confidential