UAE in initial accord with US to fight tax evasion

The UAE finance ministry said Tuesday it has reached an agreement in principle with the United States to cooperate with Washington in its fight against tax evasion. Starting from July 1, the US Foreign Account Tax Compliance Act (FATCA) will be implemented, and institutions in nearly 70 countries will work under its rules. The law demands that the foreign banks, investment houses and others provide information to US authorities on accounts held by US citizens and firms. If they do not do so, the US Treasury says it could institute a 30 percent withholding tax on payments made from the United States to the financial institution, essentially a stiff tax on their US business. UAE Minister of State for Financial Affairs Obaid Humaid al-Tayer said that, under this agreement, the UAE will be treated as having in effect an intergovernmental agreement on FATCA, according to AFP.