US eyes FATCA pact for info on Americans’ assets in India
A fairly standard, neutral review of yet another draft IGA, this time with India. The significance here, of course, is both India’s immense population and its counteracting gravitational pull from its BRICS membership. I have already left a number of comments on the article and the field seems wide open for debate and information sharing. For those tired of the frustrating uphill climb at Huffington Post this may be a refreshing change and a chance to reach out to a very mass audience.
Thank you. I left a comment. What concerns me is how many comments seemed to agree with FATCA with complete misunderstanding. India is important because of the large population, and number of US Persons there, and the fact that India does not recognize dual citizenship. As such, there are many Green Card holders and others with US citizenship but can’t publicly admit it. FATCA compliance costs would be huge for the Indian banks – like China looking for needles in haystacks. The government should be getting aligned with China, Russia and resist FATCA.
Thanks Deckard, I left a comment too, let’s see if it gets unstuck from moderation.
India’s big concern these days is chasing down “black money” hidden by Indian companies in foreign tax havens. So at first glance a lot of Indian readers who never heard of FATCA before think that it can help them with this problem. Have to make them understand that FATCA’s so-called reciprocity is a mirage and just an excuse for the US to impose costs on India.
A couple interesting exemption in the Indian IGA draft:
“It is also being considered whether the accounts and certain assets of the NRIs, who might be US citizens, should be exempted”.
I think NRI stands for non-resident Indian, i.e. an indian person not living in India, but might have US nationality. Does that mean that Indian green card holders living in the US would be exempt?
“any interest in a social security, social insurance, or other similar programme of a foreign government is also exempted from reporting under FATCA.”
The article inaccurately says that the intent of the IGA agreement is to “combat any possible tax evasion by its residents”, which we know isn’t true. The intent is to tax U.S. persons no matter where in the world they may reside.
Also I am not really sure that an IGA exemption for government run income pension programs is all that great of a concession given the fact that the employer sponsored pension programs constitute a significant amount of a retired person’s annual income.
Overall I would say that the double taxation burden that is carried by “passive” income is one that discourages capital investment and the current reception of employer supported benefits. The idea that the U.S. government would engage in “carving” up our none U.S. income in ways that hurt the U.S. person while benefitting the U.S. government is grotesque.
Yes, everyone should remember that IGA exemptions are not concessions to US Persons. IGA exemptions are concessions to industry participants to reduce their costs for administering certain types of accounts, so that they’re happier to get on board with the rest of the invasive reporting on all the other kinds of accounts. Actual US persons are still being threatened with ridiculously complicated tax forms and fines for holding those accounts.