Recently updated federal regulations from the Internal Revenue Service require imperative actions for UAE Expats from America. Expatriates in the United Arab Emirates, particularity in Dubai and Abu Dhabi, represent a nine to one ratio to natural citizens. Many Americans relocate to this area for the exceptional employment and investment opportunities. As of January 1, these citizens must comply with the updated tax regulations released by the IRS.
What are the new tax laws for expats from USA living in UAE?
The updated act from the IRS requires that American citizens report their worldwide income. Along with foreign bank account balances to pay taxes in the United States.
Jim O’Niell, Vice President of the US Financial Advisory and Audit Firm, explained the regulations and said, “The UAE has signed a deal to implement the Foreign Account Tax Compliance Act. The law requires foreign financial institutions to provide annual reports on account information of customers who are US citizens. The act was enacted by the US Congress in 2010 to target non-compliance by US taxpayers using foreign accounts.”
The IRS released a media advisory on November 23, 2015, confirming that it upgraded its tax compliance act.
What are the new banking regulations for UAE expats from America?
In addition to reporting income in the UAE, Americans with a balance of $10,000 or more in their bank accounts must submit a Report of Foreign Bank and Financial Accounts. Per the Financial Crimes Enforcement Network, this report is used to report and authorize a foreign financial account and must be received by the Department of Treasury on or before June 30th of the year immediately following the calendar years it’s reported.
What are the consequences if an American does not comply with the tax and banking regulations?
If an expat from America living in UAE does not comply with the updated regulations, they risk losing their passport.
The US Financial Advisory and Audit Firm released a statement that read, “It is possible that the United States expats could have their passports revoked next month if they fail to comply with their tax and financial obligations under the Foreign Account Tax Compliance Act (FATCA).”