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American business leaders working in Bahrain and neighbouring Gulf States are on a ‘door knocking’ exercise to win support from political leaders and policy-makers back home in the US.
The Middle East Council of American Chambers of Commerce (MECACC) has a series of top-level meetings scheduled this week and will raise the thorny issue of tax and the necessity of building trust.
H Delano Roosevelt, chairman, MECACC, who lives in Janabiya, said: “I am off to Washington DC with 18 other Americans for a week’s worth of door-knocking.
“To date we have 76 confirmed meetings with ranking members of the House and Senate as well as first year members of Congress. It is the belief that when MECACC visits we have to make legislators aware of our issues so we gain more support and awareness on Capitol Hill.”
All issues will be open for discussion and the grandson of the former US president Franklin D Roosevelt will also point out the importance of exports to the economy.
The US levies income tax on its citizens, regardless of residency, and therefore requires its citizens living abroad to pay taxes on foreign income.
On top of that, the Foreign Account Tax Compliance Act (FATCA) is a federal law that requires individuals who live outside the country to report their financial accounts held outside of the US, and requires foreign financial institutions to report to the Internal Revenue Service (IRS) about their US clients.
For this reason, the increased reporting requirements have had extensive implications for US citizens living abroad.
“It’s so complicated and time consuming,” said one US citizen working in Bahrain. “It’s hard and sometimes HR departments are not aware of the requirements and processes which can cause some angst. You have to take it upon yourself to follow up on matters and hope you get it right without annoying too many people or making a mistake and getting into trouble.
“It’s understandable why some people just think it is too much hassle and decide to stay at home.”
Mr Roosevelt and his business colleagues are aware of the challenges and are determined to press for a fairer system. He said: “We will be meeting with senior staff from the Committee on Foreign Investment in the United States and will be discussing FATCA and current tax policy affecting our members and how it negatively affects foreign investment into the United States due to a ‘lack of trust’ from our host countries.
“Also, members will be meeting with the Deputy Assistant Secretary of the Treasury Robert Stack, head of tax policy at the Department of the Treasury. With him we will be discussing FATCA and FEIE and how it affects US citizens abroad.”
MECACC has established itself as the ‘voice’ of American businesses in the Gulf region and represents more than 950 American businesses, where it fosters US business activities and actively encourages US Government policies that promote American commercial interests in the region.
Members are working hard to assist US companies to gain a share in the very competitive GCC export market. The competition from Europe and East Asia have developed sophisticated export strategies which provide strong and direct government support for their citizens and companies in the region, it says. MECACC is committed to ‘levelling the playing field’ for US companies and going head-to-head with the competition.
