(MENAFN- The Peninsula) With the US tax season in full swing, PwC's US compliance tax and advisory team are helping Qatar residents with US interests to navigate the complex intricacies of US tax law. For those living in Qatar, the need to comply with stringent US tax requirements still remains.
US taxes are to be filed by all US persons. This includes US citizens and green card holders or a foreign national who spends time in the United States, such as a Qatari or a GCC national who travels to the US for business or employment or individuals who are born in the US but have never lived there.
"One of the major problems is that many people have misconceptions on who needs to file a tax return or which activities must be reported," says Stephen Drake , Tax Partner€PwCQatar."It is crucial to have a thorough and current understanding of US tax law to avoid legal and financial ramifications."
A misconception many US persons have is that if the exclusion for foreign earned income exceeds their income, it is not necessary to file. All US citizens, green card holders and many others living abroad must file US tax returns regardless of income. US taxpayers who have combined foreign accounts that exceed $10,000 will also need to file a foreign bank account reporting, commonly known as a FBAR form.
Investing in business interests outside of the US can cause exposure to complex tax issues that can become expensive without proper upfront planning. Ownership interests in businesses outside the US may have additional annual reporting requirements that must be submitted to the Internal Revenue Service.Certain foreign investments maybe subject to onerous and complex reporting, for instance foreign mutual funds.Failure to timely file these additional reporting requirements can result in substantial penalties starting at $10,000.
Transfers of property or cash by US persons may also have tax implications under US tax law. This applies whether the transfer was in the form of a gift or inheritance, or if the transfer comes from a foreign corporation or person. "Non-compliance with US tax filing obligations may result in substantial civil and criminal penalties," continued Stephen Drake.
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