Gulf expats be ready to share tax-related details with banks

 

Following the implementation of new global transparency policy that aims at fighting against cross-border tax evasion and also for ending banking secrecy in taxation matters, the expats living in Gulf have been alerted by the banks and soon will be collecting tax-related information from their customers starting from next year. 

 

Due to a large amount of offshore tax abuse, countries across the globe are looking for different ways to trace and monitor unpaid tax of residents overseas. 

 

As per reports, the US is losing ₹100 billion a year due to offshore tax abuse. 

 

As a result of this misappropriation, a common reporting standard (CRS), known as global FATCA, which is Foreign Account Tax Compliance Act in the United States (US) has been adopted by many countries.  

 

CRS is headed by Overseas Economic Cooperation and Development (OECD), and it has the European Union and many signatory countries, that includes the UAE, UK, India, Canada, Lebanon, Indonesia, Turkey, Mexico and many more. 

 

The main purpose of CRS is to facilitate the exchange of various information among different countries related to expats or individual bank accounts, income, interest, and dividends earned away from their own country. 

 

As per the regulations of CRS, financial institutions of the signatory countries will start implementing the policies by collecting tax-related information of the expats. 

 

The impact of CRS will depend upon a number of parameters including account type or location or type of business an expat operates. 

 

HSBC bank on its website assured to its customers that “Don’t worry, we will contact you if you are affected and will confirm what you need to do to make sure that we correctly identify where you are tax resident.”

 

The nature of the information and details required from the expats have not been disclosed till date by the banks.