As long time IBS readers have known, we have been saying that a global GATCA was the ultimate goal of the FATCA mis-adventure. It was the dream of the ideologues in Treasury and the IRS who who have been responsible for the implementation of FATCA.
The most recent posting about GATCA on Isaac Brock in this article by Alex Newman
From FATCA to GATCA – Alex Newman hits another home run
Update 2/17: Alex has a new article out…
Globalists Unveil Socialist-backed New World Tax Regime
Maybe Obama, when he launched his offshore jihad didn’t understand what he was doing. (video here) Maybe Congressman in their FATCA PR announcements back in 2009, were just witless vassal’s and didn’t know it. Certainly few Congressman knew they passed it hidden in stealth in the Hire Act, but this is what we now are getting. A gotcha GATCA!
If you search for GATCA terms in archives you will find other earlier pieces last year like here, and the references go back farther in the comments. We were watching for the blow back onto domestic shores in the form of the reciprocity DATCA, the history of which is documented here., but it is beginning to look like that GATCA will get here first. Will America’s Congress accept it? Time will tell, as they say.
Today, after a lot of anticipation, we now have the official birth announcement, on the web site of the OECD , Jesse Eggert’s new employer.
Standard for Automatic Exchange of Financial Account Information
Get used to the new acronym that is common in the OECD and FCC (FATCA Compliance Complex) parlance,
AEOI or Automatic Exchange of Information.
I have a feeling you will be seeing it or some variation of it more often now.
Bottom line, AEOI = GATCA and this monster was created by the Union of its FATCA Father and OECD mother.
I am moving some discussion around this subject from Alex’s thread, because I think it is important you read and consider how this GATCA will factor into the CBT (Citizenship Based Taxation) reporting requirements under FATCA, and the RBT (Residency Based Taxation) reporting under GATCA.
How does that work? Will the U.S. just meekly acquiesce and accept this new global norm, which came from Treasuries Robert Stack’s “Gold Standard”? What if they don’t?
Also, notice how this is already factoring into the FATCA IGA acceptance thinking of affected FFIs. If I were a country faced with signing one of these, I think I would be confused. Which way am I supposed to go? How do I reconcile the conflicts. Do I do both, or do I accept FATCA as supreme over GATCA? How do I reconcile the conflict claims of types of taxation?
GATCA is born:
OECD proposes data exchange norm in tax evasion crackdown:
Here is the most relevant information:
“The OECD’s top official for financial issues, Pascal Saint-Amans, said the OECD’s proposed standard is in effect a multilateral version of the US FATCA, or Foreign Account Tax Compliance Act.
One major difference, however, is that the OECD standard will be based on a residency test rather than nationality, according to OECD officials.
It will cover not only bank deposits, but interest paid and capital gains.
It will also require reporting of the ultimate beneficiary, which should hinder the use of trusts and shell companies to evade tax liabilities.
Saint-Amans acknowledged, however, that gold and other precious metals will escape the system as banks aren’t forced to open their vaults and safe deposit boxes, (YET!) and this could pose a problem.”
Noone goes onto say….. The US needs to scrap FATCA and adopt the OECD system. As long as FATCA lives, with the withholding threats, discrimination of Americans will continue, even with a global OECD GATCA.
From Osgood….
look at this comment in a FATCA submission to the NZ Select Committee hearing 2 days ago from NZ AMP…
“We submit that as it does not seem to be feasible under the wording of the draft IGA to separate “review, identify and report”, Financial Institutions must be allowed to identify and review ALL accounts. We further submit that they should be allowed – for consistency with the new global standard for automatic exchange of information – to report on ALL accounts, regardless of balance.
This is going to get ugly ……
-
@just me … “this is going to get ugly.”… agree agree agree…. see caracalla “as long as we have this [pointing to his sword]… we shall not[be poor]“……………… waiting and watching for [i am] the establishment of other global reserve currency……………….
-
OECD Releases Draft of Radical Country-by-Country Reporting Template
Thanks Haydon…
Wonder if this is the way the Executive is going to impose CDD DATCA onto USFIs to meet reciprocity promises and avoid Congress like it does with everything these days… Just order it to be so without regards to Congressional wishes…
http://www.fincen.gov/statutes_regs/files/CDD-NPRM-Final.pdf
Customer due diligence also facilitates tax reporting, investigations and
compliance. For example, information held by banks and other financial institutions
about the ownership of companies can be used to assist law enforcement in identifying
the true owners of assets and their true tax liabilities. The United States has long been a
global leader in establishing and promoting the adoption of international standards for
transparency and information exchange to combat cross-border tax evasion and other
financial crimes. Strengthening CDD is an important part of that effort, and it will
dovetail with other efforts to create greater transparency, such as the new tax reporting
11
See,
provisions under the Foreign Account Tax Compliance Act (FATCA).12 FATCA
requires foreign financial institutions to identify U.S. account holders, including legal
entities with substantial U.S. ownership, and to report certain information about those
accounts to the Internal Revenue Service (IRS).13 The United States has collaborated
with foreign governments to enter into intergovernmental agreements that facilitate the
effective and efficient implementation of these requirements. These agreements and, to a
lesser extent, the applicable FATCA regulations, allow foreign financial institutions to
rely on existing AML practices in a number of circumstances, including, in the case of
the agreements, for purposes of determining whether certain legal entity customers have
substantial owners. Pursuant to many of these agreements, the United States has
committed to pursuing reciprocity with respect to collecting and reporting to the
authorities of the FATCA partner information on the U.S. accounts of residents of the
FATCA partner. A general requirement for U.S. financial institutions to obtain beneficial
ownership information for AML purposes advances this commitment, and puts the
United States in a better position to work with foreign governments to combat offshore
tax evasion and other financial crimes.
Ah, more hilarity from FinCEN. They’re relying on US bank officers to be able to tell the difference between foreign ID cards which are evidence of nationality, and those which aren’t, to identify beneficial owners of entity accounts. This should produce amusing results.
Oh yeah, and foreign nationals opening accounts in US banks still won’t be required to prove their domicile, let alone tax residence (p 47): “Obtaining basic information about the customer, such as annual income, net worth, domicile, or principal occupation or business, may similarly be relevant depending on the facts and circumstances.”
In other words, even if these regulations go unchallenged and the US really starts providing FATCA reciprocity (two giant “if”s), “partner governments” are still going to face gaping loopholes in getting information about their own residents’ foreign accounts. People living outside of their passport country can easily evade the scrutiny of tax authorities in their country of residence by providing their passport and an address in that passport’s country, e.g. relative’s address. (But of course, US regulators think the U.S. is the only immigrant country on earth, so they probably haven’t even thought of the case of people who are immigrants in other countries.)
And once they provide that address in their passport country, then two things could happen: the IRS might send the account data to that passport country, but that country’s tax authority doesn’t care because the person to whom it pertains has already declared his non-residence, and they don’t have any authority to forward that data onwards to his country of residence. Or, the IRS doesn’t send the account data to that passport country because the passport country signed a non-reciprocal IGA, in which case no one outside of the US will ever get any data about the account in the first place.
@Eric…
Faux reciprocity, I think it is called.
Pingback: The Isaac Brock Society | China makes officials pledge to bring home overseas family members & give up foreign permanent residence or citizenship