The Arabian Gulf Region Committee
The U.S. Export and Taxation Policy Committee
The Arabian Gulf Region Committee and the U.S. Export and Taxation Policy Committee's mission is to protect the interests of American individuals and companies working abroad in relation to certain counterproductive tax and banking legislation.
Both committees are chaired by AmCham Abu Dhabi.
Issues discussed by the committee include:
1. Foreign Earned Income Exclusion (FEIE)
The Foreign Earned Income Exclusion under the U.S. tax code excludes from federal income taxes an annually-adjusted amount of income earned abroad by individuals who meet the certain residency requirements. According to reports from Washington, the so-called Congressional "Super Committee" is considering elimination of the FEIE in connection with its review of tax deductions and exclusions to be eliminated to help reduce the deficit. AmCham MENA's position is that the FEIE must be maintained and its cap removed until citizenship-based taxation is abolished and replaced by territorial taxation.
2. Foreign Account Tax Compliance Act (FATCA)
The Foreign Account Tax Compliance Act imposes a new and more onerous foreign asset tax reporting regime upon foreign financial institutions and U.S. citizens with financial assets held outside of the United States. FATCA requires all foreign financial assets to be reported under threat of heavy penalty for inaccuracies. U.S. citizens residing abroad will be required to list foreign assets with their tax declaration, while Americans living in the United States have no comparable requirement. Foreign financial assets are already reported on the FBAR form which is sent to the Department of Treasury, so there will now be double reporting of assets, but with different criteria, to be sent to two different administrations, with cumulative penalties for non-filing.
3. Foreign Bank Account Report (FBAR)
The Foreign Bank Account Report is an annual filing that must be made with the Department of Treasury by U.S. citizens with signature authority over a foreign bank account which at any point during the year has a balance of more than $10,000. The IRS imposes rigid penalties for not filing the FBAR form, even if an individual declares all income and pays all taxes due. The law was intended to focus on U.S.-domiciled tax evaders, but seriously impairs Americans residing overseas, as it does not take into consideration the different context which distinguishes such persons from U.S. tax evaders residing in the United States.
AmCham MENA is pleased to provide this information as a service to its members. However, AmCham MENA does not provide tax or legal advice, and urges members to seek professional accounting or legal advice if you have questions about your tax filing obligations.
For more information on the Arabian Gulf Region Committee and the U.S. Export and Taxation Policy Committee, please contact Ms. Lisbeth 'Liz' Beneski.
[email protected]