Canada appears to be putting up significant resistance in order to protect its citizens and residents according to its own charter of rights and democratic principles of fairness and justice. The continuing Canadian experience in this struggle ought to serve as a model for Switzerland’s (and other nation’s) necessary attempts to do the same.
- firstname.lastname@example.org (Swiss Federal Department of Finance) — sent 1353 CET 15.02.2012
- email@example.com (Swiss Federal Foreign Ministry) — sent 1353 CET 15.02.2012
- By email submitted through web interface (within the limits imposed by such) at : http://www.ejpd.admin.ch/content/ejpd/fr/misc/conform.html?contactid=0005&backpagepath=/content/ejpd/fr/home (Swiss Federal Department of Justice and Police) – submitted via aforesaid web interface 1358 CET 15.02.2012
- Webmaster of the Swiss Federal Chancellery firstname.lastname@example.org — sent 1353 CET 15.02.2012
- Isaac Brock Society (www.isaacbrocksociety.com) – posted ~1425 CET 15.02.2012 (issues with WordPress delayed intended release at 1405 CET).
Email subject= “Canada resists US extraterritorial tax policies, Switzerland must too”.
Suisse Romande, 15 February 2012
Dear Sir or Madam, Swiss Federal Counselors, Swiss Federal Administrative Officials:
I would like to draw to your attention recent discussions on a Canadian website concerned with the fair and just treatment of US persons living abroad. These discussions are germane to the current negotiations between the US and Switzerland. Such negotiations, if not conducted in a conscientious fashion by the Confederation, may have catastrophic effects on the lives of US persons living legally in Switzerland (and even CH-US dual nationals) and their non-US (potentially Swiss) family members. If Switzerland and other nations do not oppose US policy, the US may in the future increasingly intrude into the sovereign matters of all nations and all persons regardless of their status of citizenship or green card vis-à-vis the USA. Remember the old English adage which has equivalents in many languages “If you give ‘em an inch, they’ll take a mile”.
Canada, like Switzerland, seems to be high on the US government’s list for its efforts to seek to enforce its extraterritorial (even imperialistic) tax policies. Nonetheless, Canada appears to be putting up significant resistance in order to protect its citizens and residents according to its own charter of rights and democratic principles of fairness and justice. The continuing Canadian experience in this struggle ought to serve as a model for Switzerland’s necessary attempts to do the same. Some evidence of the Canadian experience in this matter follows:
- It would appear that by signing the OECD treaty on “Mutual Administrative Assistance in Tax Matters”, Canada has reserved its right not to collect US taxes from Canadian residents and citizens: http://isaacbrocksociety.com/2012/02/13/3200/ This is an excellent start, however unilateral declarations of the inadmissibility and injustice of US extraterritorial double taxation needs to be forthcoming in the near future from Canada, from Switzerland, and all other nations on Earth.
- Letter from Canadian Finance Minister to a Canadian resident: http://isaacbrocksociety.files.wordpress.com/2012/01/hon_jim_flaherty_new1.pdf
- Particularly significant in this letter is the text on page 2, middle and end of paragraph 4: “…Canada-United States Income Tax Convention… this does not apply to penalties imposed under laws that impose only a reporting requirement [e.g. FBAR] Furthermore, the CRA [Canada Revenue Agency] does not and will not collect the U.S. tax liability of a Canadian citizen if the individual was a Canadian citizen at the time the liability arose (whether or not the individual was also a U.S. citizen at that time).”–Brackets “[ ]” and triple periods “…” mine.
- Here is the link to the Isaac Brock discussion of the Flaherty letter: http://isaacbrocksociety.com/2012/01/27/reply-letter-from-minister-of-finance-hon-jim-flaherty/
- It appears that the US has even condemned the use of a “Diaspora tax” by means of UN Security Council Resolution in the matter of Eritrean extraterritorial taxation of Eritrean nationals. (Please do search for “Diaspora tax” on the page given by the link in 2b above, please read the text and follow the links.) Such US international policy is inconsistent with the manifest US policy of attempting to subject US persons abroad to double taxation. Indeed, the double taxation attempted by the US is in violation of one of its core revolutionary principles of “No Taxation without Representation”.
Current US policy with regard to US persons living abroad results in unjust and unconstitutional double taxation, especially in view of the structural differences between US and Swiss (and other) domestic taxation systems, and the effects are further exacerbated by the current currency exchange-rate situation. US policy impedes the economic activity of lawful Swiss residents who pay Swiss taxes and contribute to the Swiss economy. The middle class is especially disadvantaged, but the issues can affect laborers in like fashion (e.g. Swiss mandatory 2nd pillar and optional 3rd pillar retirement savings are apparently considered as accounts that must be declared and taxes on therein-earned interest and capital gains paid to the US). The economic activities of the upper classes that may also drive innovation and contribute to the Swiss economy are hampered by US policy in a similar manner. Those that comply with US requirements (especially those in the labor and middle classes) may find themselves in a situation where they cannot pay their bills and cannot meet the high cost of living in Switzerland and/or find that their retirement savings yield a negative or substandard return.
Clearly, we are not speaking here of rich Americans living in the US who were actively solicited and tempted by some unscrupulous bankers to park their funds in Switzerland in order to avoid paying US income tax on the principal balance earned in the US, or on the interest earned in Switzerland thereupon. We are speaking of ordinary people who work for Swiss employers, establish innovative businesses, pay Swiss taxes, and raise their families. We must not allow the US to persecute honest and hardworking people because the IRS caught US-resident millionaire tax cheats using Swiss banks.
US persons and dual nationals, Swiss offspring of dual nationals, or people born in the US that did not stay in the US beyond childhood or young-adulthood (and may now ignore the fact that the US considers them their nationals) are being increasingly shut out of banking services in Switzerland (in violation of Art. 261bis, Swiss Penal Code) and subjected to “Excessive Fines” in violation of the 8th Amendment to the US Constitution (up to 300% of assets in the worst case, with penalties of 27.5-50% in the “Voluntary Disclosure Programme” [5% in some limited situations that are very difficult for the affected person to prove]) for failure to file information returns to the US as to their Swiss accounts (even if such accounts contain funds legally earned in Switzerland that were subjected to Swiss income tax).
This atrocious treatment also affects family members of the concerned US persons. All of this looms despite the fact that, in past years, Swiss banks, and some employees and/or functionaries of Cantonal tax authorities have told people (especially Swiss citizens and Swiss legal residents) not to declare Swiss accounts to the US and not to declare to the US any revenues already taxed in Switzerland. Personally, I had been told in the past by Swiss bank and tax officials that “Double taxation is forbidden”.
Swiss citizens and legal residents of Switzerland have the right to privacy, protection of the Confederation, equal treatment, and equal economic opportunity just as anyone else living under the authority of the Swiss Federal Constitution and the Confederation. They must not, under any circumstances, pay additional taxes to the US that result in higher tax burdens than those to which their neighbors living in the same Swiss Commune with similar Swiss-earned salaries/revenues and deductions are subjected to. They must not be subjected to invasions of their privacy that violate Swiss constitutional protections (and inter alia the 4th and 5th and 8th Amendments to the US Constitution).
The increasingly intrusive policies of the US will only go further (and with time affect even non-US residents of Switzerland and all Swiss citizens) if the Confederation does not firmly plant its foot down and insist upon the principles of fair and just treatment for everyone which are essential to our core Swiss democratic values.
I urge you to consult with your colleagues and to analyze how the lessons from the current Canadian experience of resistance to the US policy and efforts to protect Canadian residents are useful to the Confederation in its current negotiations with the US. I further urge you to protect the liberty and rights of the people and safeguard the independence and security of Switzerland (Art. 2, Swiss Federal Constitution) especially as to the unjust efforts of the USA to violate and/or abridge the same.
Please feel free to consult any other information on the Isaac Brock site that may be of interest to you. I cannot guarantee the 100% accuracy of anything in this present communication, or of information on Isaac Brock or any website, especially because the exact situation and nuances in the issues may frequently vary.
The present communication is a simple petition (not an initiative or referendum) respectfully submitted according to the 1st Amendment of the US Constitution and Art. 33, Section 1 of the Swiss Federal Constitution. In accordance therewith, I shall not be subjected to any prejudice for having submitted the present petition to the authorities, nor for submitting any other such communication, past or future. Acknowledgement by the authorities required under Art. 33, Section 2 may be done by press release to Swiss media (if subsequently actually published) and/or by posting to public discussion sites related to the issues (such as Isaac Brock Society). I am not a legal representative of Isaac Brock Society. I am neither a lawyer nor a chartered accountant and nothing herein shall be construed as professional legal or fiduciary advice. I shall remain anonymous.
Jefferson D. Tomas (nom de plume)
cc: Isaac Brock Society public website (www.isaacbrocksociety.com)