If you’ve ever opened a bank account in the Gulf, say in Dubai, Doha, or Muscat, you probably remember how surprisingly smooth it felt. A passport, a work visa, maybe a letter from HR, and you’re walking out with an ATM card the same afternoon. It gives you this sense that the whole system is effortless, friction-free. And in many ways, Gulf banking is designed to be fast and practical.
But for Americans? That convenience hides a few traps. Not because Gulf countries tax your income (most don’t), but because the U.S. requires you to report far more than anyone tells you at the counter. The trouble usually comes later when a U.S. expat, who thought everything looked perfectly harmless, receives a FATCA letter from the bank or learns that their “simple salary account” should’ve been reported to the IRS years ago.
Once you peel back the surface, the picture gets more complicated.
What Gulf Banks Actually Report Under FATCA
Most major Gulf banks like Emirates NBD, ADCB, QNB, Riyadh Bank, and so on have signed agreements under FATCA. This means they’re obligated to identify U.S. citizens and send account details to their local authority, which then shares it with the U.S. Treasury.
It’s usually just the basics:
- your name and address,
- account numbers,
- year-end balances, and
- sometimes gross interest or profit.
But the surprise hits when a bank asks you for a W-9 or your U.S. TIN out of nowhere. People panic, thinking they’re in trouble, when the bank is simply trying to avoid penalties for holding “recalcitrant” U.S. accounts.
FATCA isn’t a tax. It’s information sharing. And once you understand that, it becomes easier to breathe again.
When Normal Accounts Create FBAR Problems
FBAR filings (FinCEN Form 114) apply when the combined value of all your foreign accounts exceeds $10,000 at any point in the year. This is a 2025 rule (unchanged, for now), and expats underestimate how easy it is to cross that line.
Think about a typical Gulf setup:
You have a salary account, a savings account, and maybe a separate card for travel or online purchases. None of them are large individually, but put together? They may cross the threshold on payday.
I’ve also seen people forget about accounts their employers opened on their behalf. Those count too if you can access or use them.
The penalties for missing FBAR can be rough; non-willful penalties can go up to $16,536 per violation for the 2025 filing year but the real issue is that people don’t even know they were supposed to file in the first place.
Joint Accounts: The Family Trap Nobody Warns You About
Gulf families often share accounts in a way that feels normal and practical. A U.S. citizen might be added to their spouse’s account for ease of access. Or the family keeps one “household account” for bills, school fees, groceries.
Under U.S. rules, if your name is on the account or you have signature authority, you must report the entire balance, even if you only use it to pay the electricity bill.
It’s awkward to explain to your spouse that their account balance will now appear on a U.S. government form. It feels invasive, and honestly, I sympathize. But that’s how the U.S. reporting system works.
Employer Accounts: The Sneaky Ones
A lot of Gulf employers manage payroll through accounts created in the employee’s name. Even if you didn’t request it, if the account is yours and you can withdraw from it, then in U.S. terms, it’s yours to report.
Investment Products That Turn Into PFIC Nightmares
Some Gulf “profit rate” savings plans, structured notes, and offshore mutual funds are treated as PFICs under U.S. tax law. PFICs require Form 8621, which is… not a form you want to meet alone. The tax treatment is notoriously harsh if you pick the wrong method.
Most expats don’t realize they’ve bought a PFIC until tax time, when their accountant delivers the bad news.
Currency and Conversion Mistakes
Even in countries with pegged currencies like AED or SAR, the IRS still expects conversion using Treasury’s yearly exchange rates, not retail bank rates. That mismatch leads to errors that raise red flags during audits.
Need Guidance? Expat US Tax Can Walk You Through It
If you’re dealing with Gulf bank accounts like salary accounts, joint accounts, employer accounts, investment plans, it’s easy to get tangled in reporting rules you didn’t know existed. Expat US Tax helps Americans in the Gulf every day, whether it’s navigating FBAR, FATCA, PFICs, or sorting out years of unreported accounts.
You don’t need to figure it all out alone. Reach out, and we’ll help you make sense of it cleanly, calmly, and without judgment.
