Ask your questions about FATCA.
This discussion has been continued here: FATCA Discussion Thread (Ask your questions) Part Two
Ask your questions about FATCA.
This discussion has been continued here: FATCA Discussion Thread (Ask your questions) Part Two
Thanks, Just Me.
Good for the UK. May they be leading the way for / waking up other countries.
@calgary411: Good for the UK. May they be leading the way for / waking up other countries.
Hmm. Two cheers, maybe. But I’d reserve the third. I don’t think it at all impossible that the UK might go along with the IGA even if the US didn’t fulfil its side of the deal.
On the back of a reply I’d received from him back in the summer, I wrote again to the UK minister in charge of this three weeks ago, and pointed out the doubt surrounding the US side of the IGA reciprocity. No reply to date. Maybe he’s not read it yet. Maybe he’s waiting to see what the US decides. Or maybe he’s blown off the comment entirely and will go ahead even if the US reneges on its half of the deal to leave the UK with yet one more entirely one-sided “treaty”. Don’t know which yet. Perhaps I’ll give it a couple more weeks and then follow up.
FFIs facing legal conflict with Fatca compliance, experts warn
A couple quotes from the article that I find interesting:
“national governments will have to hurry to put IGAs in place, or see their banks forced to choose between breaking local law or non-compliance with Fatca.“
“IGAs deal with this issue by allowing FFIs to report US account-holder information to their domestic tax authority – assuming that legislation has been passed to allow this – rather than directly to the IRS and so breaking local data privacy laws.“
“The whole point of the IGAs is to make Fatca less complex to comply with.“
From the US perspective I guess… because they’ll only have to deal with one government instead of many banks.
“But more importantly, the IGAs are intended to overcome the wider legal and jurisdictional issues in compliance with Fatca because before the IGAs an FFI was faced with having to decide whether to comply with Fatca or whether to breach local law. To be honest, it’s not acceptable to breach local because that risks losing your banking licence.“
Newton explains that while an IGA itself will not supersede local law, it will allow for jurisdictions to enact the laws necessary to comply with Fatca. And this explains the rush to get IGAs signed. “The whole point of the IGA is that a government will try and get domestic legislation in place so that you won’t breach jurisdictional rules by complying with Fatca, so for countries that don’t have an IGA it’s going to be a rush between now and July 2013.”
Just some references to articles you may not have seen.ACA and FATCA in the Press
ASFA casts doubt on FATCA exemption
Just had to record this comment I saw at the RoyalGazzette online.
http://www.royalgazette.com/article/20121012/BUSINESS/710129955
I keep wondering how far the U.S. will really go with this U.S. person jihad. What in the hell are they going to do with all the data from Bermuda if 30% of the population is considered a U.S. Person? I think all our warnings will be to naught until the impacts really start happening.
*Unlike birth abroad to a US-citizen mother or to a married couple, claims of citizenship on account of an American father require a statement of support (unless the father is deceased) and a filing by age 18. http://www.state.gov/documents/organization/86757.pdf
AFAIK the only exception was the Amerasian Homecoming Act of 1987. An interesting issue is raised by sperm donation: this is a significant export industry for the USA because some countries, notably the UK, have unreasonable rules on sperm donation (including support liability). Donors, the mother and the surrogate, if any, can specify terms under which the identity of the father will be made available to the child at age 18, too late to benefit from US immigration law. This is dealt with in the FAM provisions I’ve linked to above. It’s lately been a contentious matter among IVF mothers in Israel and elsewhere: http://www.slate.com/articles/double_x/doublex/2012/03/fertility_tourism_the_perils_of_having_a_baby_abroad_with_assisted_reproduction_technology_.html
If the basis for the comment on this forum is to query whether the IRS will engage in a hunting expedition to locate unknown citizen nonfilers, the answer is they haven’t the authority, the capacity or the interest in doing so. And agents of the USG cannot exercise police authority abroad except, sometimes, in conjunction with local counterparts. IRS attachés are particularly limited in what they can do outside of government-to-government liaison unless a US taxpayer chooses to visit the embassy or invites them to a business premises.
From the Arab Times. Hat tip to Renounce.
U.S. Enlists World In Crackdown On Tax EvasionUpdated oct 15. Law Termed ‘Imperialist’
@Administrator,
The link to Phil Hodgen’s blog does not work. Perhaps you can fix it?
I can’t fix it — Petros will have to. In the meantime, try http://hodgen.com/blog/, which works for me.
^^ I looked at Phil’s site. On the front page “Gifts to citizen or non-citizen spouses”. Just the fact that there’s a limit for “aliens” is absolutely terrible. A lot of people despise discrimination in the US (I hope), but no one seems to object to laws like this. I told my wife, and she thinks is protectionalism for American women.
The US really needs to work on their terminology. That’s probably a good starting point. An “alien” for most people is a creepy thing from a distant planet. I’ve personally never seen an “alien”, except on TV. Is it really thhhatt hard for them to say/use “non-citizen” instead???
Don’t Feel like FATCA?
@geeez, The original meaning of the word “alien” is “foreigner”. It comes from the Latin word for “other”, and it was not supposed to be a derogatory term. The problem is that people started using this word to refer to extraterrestrials, and I agree that today it’s weird to call a person an alien. The US government should probably use a more contemporary word like “foreigner” or “noncitizen”, but it’s not really their fault that “alien” got a different meaning.
@John Brown…
I think this was what you were trying to post… Cute Video
Just me,
Thank you, I couldn’t figure out how to make the link. And thank you for all of your words of wisdom and common sense during these difficult times for expats.
Just recording a couple links here, that have been posted elsewhere on IBS..
This on China good.
http://www.scmp.com/news/china/article/1060557/tax-bills-prompt-chinese-ditch-us-passports
Financial Centres Shy from FATCA Spotlighthttp://www.iexpats.com/2012/10/financial-centres-shy-from-fatca-spotlight/
Lawyers cash in on FATCA
Even the Aussies can see the friggin’ obvious. The attorneys will do nicely out of this, while it will cost the Australian government and financial community big time.
Thanks for that Just Me,
I especially note part of the quote above : “The total cost of implementation will likely far exceed the projected
$US8.7 billion the US government is hoping to recoup in lost tax
dollars, Granwell added. He pointed out that the Australian Tax Office
also faces “tremendous” administration costs as it moves towards a
system of automatic information exchange with the US Internal Revenue
Service.”
Oviously, FATCA should be a pressing concern for the non-US persons in Australia, Canada, and elsewhere, because as has been underscored in the CBA and other threads here, NON-US citizens will be paying for the costs of implementation – with no advantage to themselves or their home countries. We’ve already identified that ALL bank and investment account holders will likely be paying for the huge FATCA implementation costs that the banks and financial institutions will pass on to ALL of their customers.
The quote above brings up the issue of the associated FATCA costs to be incurred by the Revenue agencies of each sovereign country, such as our Canada Revenue Agency and Ministry of Finance – which of course are paid for out of ALL citizens and resident taxpayers pockets, not just those that FATCA says are the targets. So, ALL Canadians will be bearing increased tax costs to pay for whatever added burdens the Canadian Federal government will be forced to bear if it allows FATCA to be implemented in any form in Canada. And we know that any advantage is skewed towards the US. So, again, why should any sovereign country help to subsidize the US, IRS, US Treasury, US banks, and US economy?
FATCA implementation method remains uncertain for now
The treasury answered Senator Rand Paul’s letter regarding FATCA
Treasury Letter to Sen. Rand Paul (R-Ky.) regarding FATCA IGAs
Key points:
– Withholding is the US government leverage to force FFIs to comply.
– FATCA is between the US and particular countries, not between US and OCDE or EU. (Does that mean OCDE and EU don’t have anything to say about it?)
– IRS can share US persons info with other governments if there is a tax treaty.
– Reciprocity: Scope of what US shares versus what other countries share is different. Equivalent levels of reciprocity in the future. For now, no additional obligations will be imposed on U.S. financial institutions unless and until additional laws or regulations are adopted in the United States. (do they mean other obligations than identifying foreign persons, such as withholding?)
@Christrophe..
Good find. Now, I would like to find the entire letter and then send see if Senator Rand Paul is satisfied with the answer. I would think not.
I actually found the full letter here.
Great work Christophe.
Thanks so much
@Christophe
Nice find. I found this excerpt priceless:
“The information that the United States would agree to exchange under the reciprocal version of the Model Agreement differs in scope from the information that foreign governments would agree to provide to the IRS. In fact, the information specified to be exchanged by the IRS under the reciprocal version of the Model Agreement is limited to the information that U.S. financial institutions will be required under existing regulations to report to the IRS about nonresident accounts for 2013. While the reciprocal version of the Model Agreement includes a policy commitment to pursue equivalent levels of reciprocal automatic exchange in the future, no additional obligations will be imposed on U.S. financial institutions unless and until additional laws or regulations are adopted in the United States.”
US Govt message to the rest of the world: Hey, we’re gonna reciprocate on this information exchange you’re signing up to do for us!
US Govt message to its own constituents: Don’t worry, we’re not actually going to reciprocate on information exchange with those chumps.
Like I’ve said before; faux reciprocity. Reason number 572 as to why FATCA is a bad idea.
@Just Me
‘I think all our warnings will be to naught until the impacts really start happening.’
I’m afraid you’re destined to be proven right unless there is some kind of divine intervention as the FATCA genie has already left the bottle. Innocente recently posted this on
FATCA: A ticking time bomb for the economy
The article published by HSBC is over a year old, but warns of the devastating effect FATCA will have on US companies venturing abroad. It carries some loose facts and is poorly edited, but was nonetheless a warning signal that has since gone unheeded by those who can stop it. http://globalconnections.hsbc.com/united-kingdom/en/news-insight/expat-taxes