As the world becomes more stringent on tax transparency, FATCA reporting in the UAE has shifted from a mere regulatory formality to a necessary compliance requirement for banks and financial institutions.
The Foreign Account Tax Compliance Act (FATCA) is a U.S. regulation aimed at preventing offshore tax evasion by U.S. persons. Under the Intergovernmental Agreement (IGA) between the UAE and the United States, UAE Reporting Financial Institutions (RFIs) must identify U.S. reportable accounts and submit information to the UAE Ministry of Finance, which in turn shares the information with the US Internal Revenue Service.
In the UAE, FATCA operates in conjunction with CRS (Common Reporting Standard), which is part of the larger Automatic Exchange of Information (AEOI) initiative led by the Organisation for Economic Co-operation and Development (OECD) globally.
At AMA Global Audit & Tax Advisory, we assist financial institutions and other regulated businesses with FATCA/CRS registration, reporting, internal controls, and compliance analysis – ensuring that our clients are in line with UAE regulatory requirements and best practices globally.
Why FATCA Compliance is a Necessity in the UAE
Although the UAE does not levy personal income tax, FATCA compliance is mandatory for UAE financial institutions due to international reporting commitments.
Here are the most important reasons why FATCA is a necessity:
✅ Regulatory Requirement
All UAE Reporting Financial Institutions must perform FATCA due diligence and annual reporting through the Ministry of Finance portal.
✅ Risk Management & Governance
Effective FATCA controls are an indicator of a robust compliance program, mitigating regulatory risks, and supporting internal audit and AML programs.
✅ Avoidance of Penalties
Non-compliance may lead to administrative penalties, enhanced regulatory scrutiny, and globally, potential 30% withholding on certain U.S.-source payments.
✅ Reputation & Banking Relationships
Banks and international counterparties increasingly demand evidence of FATCA compliance as part of onboarding and periodic reviews.
Key FATCA Deadlines in the UAE
While the Ministry of Finance may announce extensions in particular years, the standard FATCA timeline is: 30 June of the year following the reporting period
This applies to:
- FATCA XML submissions
- Nil returns (where no U.S. reportable accounts exist)
- Annual Risk-Based Assessment (RBA) questionnaires
📌 AMA Global advises clients to begin preparation well in advance, as data validation and XML formatting often require multiple rounds of review.
At a high level, FATCA compliance requires the following:
- Entity Classification – Confirming RFI status
- Client Due Diligence – Identifying U.S. indicia
- Data Collection – TINs, balances, account details
- Report Preparation – FATCA XML or required format
- Submission to MoF Portal – FATCA report or nil return
- Record Retention – Retaining evidence for audits and inspections
AMA Global assists clients through each of these steps, including internal control design and independent compliance reviews.
Common FATCA FAQs
Who is considered a U.S. person under FATCA?
Generally:
Certain entities with substantial U.S. ownership
U.S. citizens
U.S. residents / green card holders
Which entities in the UAE are required to comply with FATCA?
FATCA is mainly applicable to UAE Reporting Financial Institutions (RFIs), which include banks, investment vehicles, custodial institutions, certain insurance companies, and other financial entities as defined in the UAE-US Intergovernmental Agreement.
Additionally, certain Non-Financial Foreign Entities (NFFEs) may also be subject to the FATCA regime. Although NFFEs are not required to file annual FATCA returns with the Ministry of Finance, they are required to report information about their substantial U.S. owners when interacting with financial institutions.
Thus, entities other than banks may also be required to comply with FATCA, including investment funds, holding companies, trusts, and other entities based on their nature and operations.
What information is reported?
Typically:
Year-end balance or value
Account holder name and address
U.S. Tax Identification Number (TIN)
Account number
What if there are no U.S. reportable accounts?
A nil FATCA return must still be submitted through the Ministry of Finance portal.
How is FATCA different from CRS?
FATCA focuses only on U.S. persons (bilateral agreement)
CRS covers tax residents of multiple participating countries (multilateral agreement)
Both are mandatory in the UAE.
Can FATCA be reviewed as part of an internal audit?
Absolutely. Many UAE regulators and banks now expect FATCA controls to be included within Internal Audit and compliance testing programs — an area where AMA Global provides structured review methodologies.
How AMA Global Supports FATCA Compliance
AMA Global Audit & Tax Advisory provides end-to-end FATCA & CRS support, including:
- FATCA / CRS entity classification
- MoF portal registration assistance
- Due diligence framework design
- FATCA XML preparation support
- Nil return filings
- Risk-Based Assessment (RBA) reviews
- Internal Audit & compliance gap assessments
- Employee awareness & documentation support
Our approach aligns FATCA compliance with broader governance, AML, and risk-based internal audit frameworks — helping institutions to progress from “tick-box reporting.”
Final Thoughts
FATCA reporting is no longer a standalone regulatory task — it is a core component of financial governance and international compliance.
Early preparation, accurate data, and documented internal controls are critical to avoiding penalties and maintaining regulator confidence.
If your organization requires assistance with FATCA reporting, reviews, or internal audit integration, AMA Global Audit & Tax Advisory would be pleased to support.
Monish Mohan is a versatile and accomplished Auditor, VAT Consultant, Finance and Accounts Professional offering over 18 years of experience in UAE VAT, Audit & Assurance, Finance management Advisory & Accounting & bookkeeping.
