The United States and the United Arab Emirates have signed their Foreign Account Tax Compliance Act (FATCA) intergovernmental agreement, the text of which was initialed in May last year.
FATCA is intended to ensure that the US obtains information on accounts held abroad at foreign financial institutions (FFIs) by US persons. Failure by an FFI to disclose information on their US clients will result in a 30 percent withholding tax on US-sourced payments. The first data exchanges are going to take place within nine months of the end of the calendar year to which the information relates; that is, in the first instance by September 2015 and annually thereafter.
