Tax Compliance

Foreign Account Tax Compliance Act (FATCA)

FATCA overview 

The Foreign Account Tax Compliance Act (FATCA) is a US law enacted in 2010 as part of the Hiring Incentives to Restore Employment (HIRE) Act. It is aimed at foreign financial institutions (FFIs) and other financial intermediaries to prevent tax evasion by US citizens and residents through use of offshore accounts.

The purpose of the FATCA act is to detect and discourage abroad tax abuses through increased transparency, enhanced reporting, and strong sanctions.

Under FATCA, Foreign Financial Institutions (FFIs) are required to enter into disclosure compliance agreements with the U.S. Treasury and report to the Internal Revenue Service (IRS) information about financial accounts held by U.S. taxpayers, or held by foreign entities in which U.S. taxpayers hold a substantial ownership interest.

 
What is the impact of FATCA law on QNB customers?
 

QNB is committed to fully comply with FATCA regulations in all countries the bank has presence in (branches and subsidiaries). The new regulations affects banks and other financial institutions who may follow a different compliance approach than QNB. The bank may request the customer to provide additional data and fill certain forms (W9, W8-BEN, W8-BEN-E) in case if there is any US indicators identified as per FATCA regulations as follows:

For Individuals:
  • US citizen or resident
  • US place of birth
  • A current US residence address or mailing address
  • A current US telephone number
  • Standing instructions to pay amounts from the account to an account maintained in the US
  • A current power of attorney or signatory authority granted to a person with a US address
  • An ‘in-care of’ address or a ‘hold-mail’ address that is the sole address the FFI has identified for the account holder
For corporations:
  • US institution / company
  • Passive Non-Financial Foreign Entity with more than 10% US ownership 
Form W9:

Is a form issued by the Internal Revenue Service (IRS) used to obtain the information of the US citizen and disclose tax information to the IRS Department. The form includes other information such as the name, address and tax identification number of US citizens.

 
Form W8 - BEN:
 
Is a form issued by theInternal Revenue Services department used by non-US citizens who have indicators of being US citizens in order to confirm that they are non-US.
 
 
Form W8 - BEN - E:
  
Is a form issued by the Internal Revenue Services department used by foreign institutions to confirm their status under FATCA.
 
 
Note:
 

It should be noted, according to articles of the Intergovernmental Agreement (IGA) between the State of Qatar and the Government of the United States that, the customer hold the full responsibility of providing correct information and the customer should notify the bank in the event of any change in such information in accordance to the applicable principle of self-certification.

Based on that, in case you are a US Person Taxpayer (or representative) you are kindly requested to contact your nearest QNB branch/subsidiary, customer service officer or relationship manager to provide the necessary information and documentation for the same purposes.

For more information on FATCA, see the section on FATCA act in the website of Internal Revenue Service (IRS), http://www.irs.gov.
 

You may be contacted to provide further information or documentation in order to verify your tax status under FATCA.

If you have multiple relationships with different members of the QNB Group, you may receive more than one request for information. Should you have any further queries regarding FATCA/ Local legislation and your tax position, please contact a tax advisor, as QNB is unable to provide tax advice.

The Common Reporting Standard (CRS)

CRS overview

The Organisation for Economic Co-operation and Development (OECD) has introduced the Common Reporting Standard (CRS) in order to improve cross-border tax compliance and to combat tax evasion. CRS is a global standard for the automatic exchange of financial information (AEOI) between participating jurisdictions that have agreed to adopt it.

Compliance with CRS is mandatory under local law in each participating jurisdiction, including the State of Qatar. Regulations based on the CRS require QNB Group to collect and report certain information about an account holder’s tax residence.

Each jurisdiction has its own rules for defining tax residence. In general, tax residence is the country in which you live. Special circumstances (such as studying abroad, working overseas, or extended travel) may cause you to be resident elsewhere or resident in more than one country at the same time (dual residency). The country/countries in which you pay income tax are likely to be your country/countries of tax residence.

For more information on tax residence, please consult your tax adviser or refer to the OECD AEOI Portal.

What is the impact of CRS on QNB customers?

QNB Group is committed to protecting the integrity of tax systems, preventing financial crime and adhering to the required laws to comply with CRS regulations in all participating countries where the bank operates (through its overseas branches and subsidiaries). The CRS regulations affect banks and other financial institutions who may follow a different compliance approach than that of QNB, which may request the customer to provide additional data and fill certain self-certification forms related to their tax status.

Clients that hold financial accounts with QNB shall be subject to CRS due diligence procedures. Customers affected include individuals (whether banking directly or indirectly through an entity), sole proprietors and entities such as corporations, partnerships and trusts.

Generally, clients that are identified as reportable persons, i.e., tax residents of reportable jurisdictions, will be subject to reporting. Therefore, clients whose jurisdiction of tax residence is Qatar (or the country in which the account is held) only are not subject to reporting for CRS purposes (If the country where the account is held is the sole tax residence of the account holder, his/her financial account information will not be reported for CRS reporting purposes).

The forms to be completed by customers?

What information will be reported to the Tax Authorities?

If the customer (or for certain types of entities, the Controlling Persons) is a tax resident of reportable jurisdictions, then QNB Group shall report him/her (or Controlling Persons’). Information exchanges shall include account information; i.e. including the name, address, date of birth, jurisdiction of residence, tax identification number (TIN), account number, account balances and certain income, etc., to the local Tax Authorities who in turn will then exchange the data with the tax authorities of the relevant reportable jurisdictions that have signed AEOI agreements.

Note:

QNB Group is not in a position to provide clients with tax advice assist clients in the determination of their countries of the tax residence or assist clients in completing the CRS self-certification form. It is the responsibility of the clients to provide true, correct and complete information in the self-certification to the best of their knowledge and belief.
Should you have any further queries regarding CRS and your tax status, please contact your tax advisor.