Compliance Alert: Shining a light: What is the Self-Certification Form (SCF) about?
What is the FATCA/CRS self-certification all about?
There are two scenarios in which FATCA/CRS self-certification are required in UAE.
The first is where the Regulator initiates the request in order to determine which legal entities should be filing annual reports with the Ministry of Finance.
The second is where the financial institution, which has an obligation to file annual reports, requires its customers/clients to complete the SCF to help identify those accounts that must be reported as part of the annual filing.
The first is a request from the Regulator, and the second is the request that a financial institution (e.g. a bank) makes of its clients/customers.
- the United States of America (FATCA), and
- other countries under an OECD multilateral agreement (CRS).
Pursuant to these agreements certain entities in the UAE must file annual information returns as directed by their FATCA/CRS Regulators. There are six Regulators in UAE with responsibility for ensuring compliance with FATCA/CRS obligations: Central Bank, Securities and Commodities Authority, Insurance Authority, DIFC, ADGM and Ministry of Finance.
To determine if a legal entity or legal arrangement should be filing annual information returns, all legal entities and legal arrangements in UAE must complete SCFs. Each Regulator manages the process for completion of these forms. DIFC’s SCF is completed online.
Legal entities and legal arrangements licensed by Central Bank, Securities and Commodities Authority, Insurance Authority, DIFC & ADGM must file their SCFs with these Regulators. All other legal entities and legal arrangements in UAE must file such SCFs with the Ministry of Finance.
Self-certifications should be updated whenever the circumstances of the certified person changes in a way that impacts the validity of an existing self-certification.
- Financial Institution, which is an entity that falls into one of four categories (depository institution, custodial institution, specified insurance company or investment entity)
- A Financial Institution that is exempt from having to file reports – FATCA and CRS initiatives have identified certain financial institutions that are exempt from reporting obligations in the UAE.
- NFFE/NFE, which is an entity that is not a financial institution, and one which is further classified as either Active or Passive.
As such it must:
- Register with MOFUAE (either directly or through its Regulator)
- Register with the IRS and obtain a GIIN for FATCA purposes
- File annual information returns with MOFUAE on designated accounts it maintains for non-UAE tax residents.
- Due diligence procedures that identify the tax residents of its customers/clients
- Classification of its customers that are legal entities through self-certification (this exercise is similar to the self-certification which Regulators require. The purpose of this self-certification is to assist with identifying the accounts which must be reported to MOFUAE.
- Classification of the types of accounts it maintains
- Annual reporting of identification and account balance details for designated accounts. This is usually carried out in the 2nd quarter of each year with a deadline of 30 June.
- It is the Regulator of the legal entity that regulates it for FATCA/CRS purposes. There are six such Regulators in UAE.
- An entity that is NOT licensed by Central Bank, Securities and Commodities Authority, Insurance Authority DIFC or ADGM, is by default, regulated for FATCA/CRS by the Ministry of Finance.
- There are two scenarios where SCFs must be completed – one where the Regulator is seeking to identify an RFI, and the second is where an RFI requires its customers/clients to complete the form to determine how to classify the client’s account.
- It is possible for an entity such as a holding company, SFO or other investment type vehicle to be designated as a financial institution by virtue of its income sources and how its financial assets are managed.
- RFIs must file FATCA/CRS information returns (usually by 30 June in each year).
Rethink’s Regulatory and Compliance team is on hand with your FATCA/CRS requirements including assessments for entity classifications, FATCA/CRS compliant systems, regulatory registrations and filing obligations.Whatever your FATCA/CRS needs are, we can help provide the optimal support.
If you require any assistance, please email the team at email@example.com or contact the office on +971 4 294 9203 and one of our consultants will be happy to help.
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