Saudi Arabia Zakat department to report to U.S. tax authorities on foreign accounts

Saudi Arabian Department of Zakat and Income Tax (DZIT) will report to the U.S. Internal Revenue Service (IRS) on accounts held by U.S. citizens abroad in accordance with the Foreign Account Tax Compliance Act (FATCA), Talat Hafiz, secretary general of the Media & Banking Awareness Committee of Saudi Banks, was quoted as saying in Makkah newspaper.

Saudi banks which started complying with FATCA in July— will initially report on new and updated accounts, then will report on existing accounts, he added. The reports will also include income gained from investment in funds and the stock market as disclosed by the clients. 

Financial institutions that violate the law will face up to 30 percent penalty on transactions made through U.S. financial institutions, he said.

FATCA is a federal law that requires international financial institutions to notify IRS of accounts held by U.S. citizens abroad whose income or accounts exceeds $50,000.