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Alert! Stay Compliant and Avoid Penalties “2018 CRS & FATCA Reporting”

FATCA and CRS

First: CRS Reporting

On 19 August 2016, the Government of the State of Kuwait signed the CRS Multilateral Competent Authority Agreement with the Organization for Economic Cooperation and Development (“OECD”) for exchange of information for tax purposes.

Pursuant to such Agreement, the financial institutions shall provide the governmental authorities in their countries with information about profits, balances and revenues generated from the sale of assets when the beneficiaries are resident outside their home country in accordance with the Common Reporting Standard developed by OECD.

In this context, we would like to remind that the financial institutions are required to present CRS reports to the Kuwait Ministry of Finance not later than 31 May 2018 in accordance with MoF Resolution No. (46) Of 2017, regarding “Additional Preliminary Guidelines concerning Implementation of the International Agreements on Tax Information Exchange”. To satisfy this obligation, such financial institutions should engage an auditor based on the MoF approved list of audit firms in order to prepare the independent assurance reports in accordance with MoF Resolution No. (36) Of 2017, regarding “Preliminary Guidelines concerning Implementation of the International Agreements on Tax Information Exchange”.

Second: FATCA Reporting

Furthermore, the State of Kuwait entered into the Inter-Governmental Agreement (IGA) with the United States of America to Improve International Tax Compliance and to Implement FATCA, whereby all financial institutions operating in the State of Kuwait shall comply with FATCA reporting requirements and satisfy all FATCA requirements through taking a set of defined actions.

In this context, we would like to remind that the financial institutions are required to present FATCA reports to the Kuwait Ministry of Finance no later than 31 August 2018 in accordance with MoF Resolution No. (48) Of 2015 concerning the Preliminary Guidelines to implementing FATCA requirements in the State of Kuwait.

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