Central Bank to help in US tax compliance
Salameh in talks to represent local banks in reporting US accounts
The Governor of the Central Bank, Riad Salameh, is negotiating with the US Treasury to make the Central Bank the ‘reporting agent’ on behalf of all local banks for the US Internal Revenue Service (IRS).
In an effort to combat cross border tax evasion, the US Foreign Account Tax Compliance Act (FATCA) will from 2014 oblige all foreign financial institutions to identify and report their US account holders.
The Anti Money Laundering and Terrorist Funding Authority, which Salameh heads, could perform this reporting function without any change to the existing laws, Salameh said.
The bank secrecy law requires banks to obtain waivers from US persons before opening accounts. “It will be the client’s decision, either authorize the bank to report (account details to the IRS) or leave,” said Makram Sader, secretary general of the Association of Banks in Lebanon. “Our obligation as banks is to know our customer to do our due diligence.”
Sader said that all Lebanese banks will comply with FATCA: “It is unthinkable for any banking industry working outside its national boundaries not to do so.” FATCA will apply to all US citizens, dual citizens, and Green Card holders. Funds for US account holders in local banks in excess of $50,000 will need to be reported.
Reported by Hani Bathiche
Date Posted: Apr 23, 2012