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
This is going to get ugly because it was clear from the start that they intended to expand their fishing expeditions from US Persons and the threshold of $50,000 to ALL accounts no matter how small and no matter what country citizenship. The IRS spokeswoman who was interviewed recently actually admitted it.
The OECD’s standard is based on residency, and the private banking information of another country’s residents are reported to that customer’s country (as possible unreported income). Under the OECD standard, each member’s resident citizen’s private banking information remains undisclosed to them. Under the FATCA IGA’s, a specific segment of that partner country’s resident citizens (namely US persons) now have their private information reported to their home government, information which would not normally be reported without the IGA. With a FATCA IGA, a country consents to discriminating against their own citizens, not only in the sharing of their citizen’s (USP’s AND their non-US spouses) private banking information to the US, but also in seizing access to a specific segment of their population’s information they wouldn’t normally have access to.
Copy and paste comments elsewhere on GATCA
badger says
February 13, 2014 at 1:40 pm
http://oecdinsights.org/2014/02/13/fatca-fat-cats-and-tax/
Want to tell the OECD why using the Made-in-the-US FATCA model creates the very opposite of ‘tax fairness’ – due to the underlying US assumption that:
1. The US owns its citizens and even ex.greencard holders around the world, whereever they may actually reside, pay taxes, and be citizens of non-US countries – and aggressively asserts the right to tax and penalize them as if they are actually ‘US RESIDENTS’. Effectively creating US taxpayers out of children born and living outside the US, with NO US connection, other than one or more US status parent, and claiming children as US taxpayers for the rest of their lives – based solely on a long ago US birthplace.
The OECD should tell the US (which BTW effectively seems to have a controlling interest and dominates the OECD) that TAXING PEOPLE for LIFE (and beyond!) based on PARENTAGE and BIRTHPLACE is NOT the INTERNATIONAL NORM!
2. The US has created a Berlin Wall to keep those it deems to be ‘citizen-taxpayers’ inside its orbit forever – for the sole purpose of first claim on their economic output and assets – even those which originated in the tax monies of OTHER countries (think EI, maternity and disability benefits, etc.). Forcing citizens to pay 450. plus onerous and elaborate form and tax and financial asset filings for renouncing unwanted US citizenship is disproportionate and verges on abrogation of our Universal Human right to expatriate and to CHOOSE where we will award our allegiance and consent to be governed.
3. FATCA = EXTORTION, and was imposed on the globe via the threat to their banks, financial, and even non-financial institutions. IS TAXATION and capital controls imposed via might, threats and domination a worthwhile INTERNATIONAL NORM to emulate?
4. FATCA as a model asserts the mass automatic collection of information that also sweeps up the private data of NON-taxpayers – who had no obligation or relationship with the US – except familial – ex. joint accts with US status spouse. Will the OECD assert that it is endorsing an global standard based on FATCA – which rests on the presumption that the asset owners AND their non-taxpayer family and associates must report to what is effectively a ‘foreign’ power? And with inadequate data and privacy protections – not only for security reasons, but for human and civil rights? FATCA = DATAMINING – with no limits on how widely it can be distributed, and no recourse or notice to the actual owner of the data. And that is even though the vast majority of the accounts and assets in question will be legal, local and already mostly after-tax wages. The tax will already have been withheld at source – BEFORE the assets even reach the accounts.
5. Recourse to the miscollection, data theft, misdistribution, and mistreatment of our asset and personal data is not spelled out under FATCA. What kind of International norm or standard ignores any useful or sufficient remedy for misuse, abuse and errors in application? Especially in an ongoing automatic data collection, and distribution attempt of this size and scope – globally? Who will injured parties appeal to? Who will assist them? What will keep some governments and tax agencies from errors and abuse of individuals? It is David vs. Goliath.
6. FATCA operates on the presumption of guilt before innocence, of all accountholders as criminals until proven ‘tax compliant’ to the satisfaction of the US and other tax agencies. Where is due process? Is it efficient or just to choose to assume that EVERYONE is guilty, and the onus is on the individual to prove their innocence? And who will adjudicate disputes? What proof is sufficient? Who will decide on what penalties and punishment is proportionate – the US is no good model for best practices – even US tax and law professionals as well as the US Taxpayer Advocate asserts that the BSA FBAR law and penalties are confiscatory and likely unconstitutional.
badger says
February 13, 2014 at 1:58 pm
For those that tweet – tell the OECD why FATCA is NOT a good model for tax fairness – and why it is flawed – since based on the unjust the US system of extraterritorial tax and reporting imposed on citizenship or quasi-citizenship basis WITHOUT any effective US residency or any other US economic connection – that is NOT tax fairness and can never be recycled into a just or desirable model for global norms – particularly as imposed unilaterally via might and threats :
Tweets needed re http://oecdinsights.org/2014/02/13/fatca-fat-cats-and-tax/
https://twitter.com/OECD/status/433973562500972544
OECDVerified account @OECD
FATCA, fat cats & tax: #OECD Insights cites #CoenBrothers on int’l #tax law http://bit.ly/1eWPphi Automatic exchange financial info
bubblebustin says
February 13, 2014 at 6:27 pm
OECD Releases Draft of Radical Country-by-Country Reporting Template
http://taxconnections.com/taxblog/oecd-releases-draft-of-radical-country-by-country-reporting-template/#.Uv1Uanm4x1E
GwEvil says
February 13, 2014 at 6:30 pm
I tweeted this: @OECD #FATCA does NOT find “Fatcat tax cheats” #CBT is a HUMAN RIGHTS VIOLATION! FATCA ruins millions of ordinary citizens abroad!
If this were to actually replace FATCA, and thereby somehow encourage to the US to switch to residence-based taxation, then it could actually be a good thing. Could actually be a step in the direction of fairness.
Actually, I like the fact that the US’s uniqueness in clinging to citizenship-based taxation is being pointed out in such official documents. Shine the light on where the real problem lies. More open discussion of this aberrant anachronism can only be for the good.
@foo,
You could be right…
Here is something I wrote to another American Progressive that thought the U.S. could hold onto it’s Citizenship model…
I said…
I don’t think a two standard global model works. The U.S. needs to adopt the international norm, and not keep trying to impose the U.S. norm under sanction threats. I think what they are doing with FATCA and the IGAs, is just doing themselves great harm, and frankly citizenship taxation as rigorously enforced by the US since since 2009, is just transferring wealth out of other countries GNP and back into the U.S. Treasury.
At some point, countries will begin to see that.
So, FATCA, born of a good intention has birthed a global GATCA. I can almost guarantee you, (to the degree anyone knew they were voting for it),Congress had NO Idea that this was a consequence of these actions. It was NOT their intention. It has now put a strong wind into the OECD sails. One of the Chief architects of FATCA IGA implementation strategies is Jesse Eggart, who has left Treasury and gone to work for OCED in Paris.
So, what will this result in? You could say, if it forces the U.S. to drop its sanctions threats and endorse the GATCA model instead of their IGA, (even if I disagree with it) at least it would put Americans on a level playing field with residency based taxation, like everyone else. It would end the pressure that many average folks are feeling to dump their citizenship, and you could operate like Kiwis or Australians who go abroad to work or start business, unimpeded by any form filing penalties, or taxation reporting back to the country of their lottery birth. That would be a BIG positive for America competitiveness, imho.
I do know that residency based taxation is being given serious consideration in the Senate Finance budget committee and the proposals got a lot of attention in the House Ways and Means. If this Global GATCA adds pressure for that change, then that is a good outcome, although I am not sure that another global data collection program is generally good for any of us, but that is another subject…
Swiss Bankers Association regarding OECD AEoI
The Swiss Bankers Association, regarding the OECD’s Feb 13 Report on AEoI, said that the recommendations “… are in general a step in the right direction.” The statement goes on, however, to state: “In contrast, […] it is becoming apparent that the US will not be prepared to offer full reciprocity.” As many had expected, full U.S. reciprocity is, and may remain to be, a continuing issue under the reciprocal versions of the IGAs.
We all now see, with Just Me’s early predictions, the move will be to GATCA. I agree with foo re fairness: shine the light on citizenship-based taxation the US has had the arrogance in maintaining to make FATCA a cash cow for them. They will be the masters of their own fate.
and with Just Me,
I can’t see Britain and many other cash-strapped countries continuing with FATCA on an unequal basis once they see how much money is transferred out due to citizen-based taxation. I saw an estimate recently that the true U.K. national debt has reached something like $120,000/taxpayer and the taxation screws are already being put on (they lowered where the 40% band starts, even though inflation had already eroded the value of that income bracket). I am sure the British government has plans for my money.
Britain now doesn’t have completely residency-based taxation since taxpayers remain on the hook for taxes for three years after they depart. There was been a big problem with people hitting it big and moving to Monaco, so at least that rule is understandable. Taxing people who have never lived in your country and don’t even know that they are your citizens is mental.
Yes, shine a light on where the real problems with FATCA lie – citizenship based taxation and the 30% withholding.
No nation can with a straight face claim the moral high ground and gain a true consensus by using extortionate threats to get what it wants, at least in the long run. Canadian banks had no idea that the US would use its own citizens to threaten to extract wealth from them when they decided to make multi-billion dollar forays into US markets. What financial institution isn’t going to think twice about investing in the US now, knowing what lengths the US Treasury will go to extract as much wealth as they can through US citizens or any other means? Even TD bank with its knowledge of what happened to UBS due to its foray into the US had no idea that they would one day be tarnished with the same brush via CBT! I can hear them saying “Oh no! Canada could never be branded a tax haven!” Guess what, because of CBT of Canadians it is. Even with their bevy of lawyers and so much money at stake TD didn’t know any better, how could I have been expected to?
@foo
Considering the OECD to be superior to FATCA and appealing to them based on residency based taxation is like jumping from the frying pan into the fire.
OECD is implementing GATCA using 100 million dollars of US Taxpayer money to do it and Obama sent his expert over to France to help with the implementation.
They base their criteria on residency because that opens all borders worldwide and leaves no one unscathed in this unprecedented theft of other people’s money.
Just read it. It is plain what they intend to do and the Obama administration is helping them do it. Congress and the American people will not know what hit them. Nor will anyone on this planet. Individuals and businesses will be caught in a net of the most onerous and punishing tax and form compliance beyond anything FATCA intends.
FATCA is just the dry run.
http://taxconnections.com/taxblog/oecd-releases-draft-of-radical-country-by-country-reporting-template/#.Uv5jEWJdU01
I read it. It makes the hair stand up on the back of your neck.
You think we fight FATCA as an intrusion into our sovereignty and privacy?
This is SO much more invasive!
And all G-20 countries are on board. That includes Canada and the US.
Must read by Allison Christian
OECD’s Plan for Global Tax Info Exchange: Could be Deja Vu All Over Again
@JustMe:
The US signing on to the standard would appear to be a moot point at this stage since Obama sent his guy over to OECD to work on GATCA implementation asap.
Doing another end run around Congress.
Any country in the G-20 is on board for GATCA
Found this in the document:
So, now, even if you are paying tax on your assets you are “hiding” the principle. Unbelievable.
A summary of GATCA that I picked up from Linkedin…
OECD Global Automatic Information Exchange Framework Released
William Byrnes
new book for client planning – Tax Facts on Individuals and Small Business
On February 13 the OECD released the Standard for Automatic Exchange of Financial Account Information Common Reporting Standard with an accompanying Press Release and Background Information Brief. It sets out the financial account information to be exchanged, the financial institutions that need to report, the different types of accounts and taxpayers covered, as well as common due diligence procedures to be followed by financial institutions.
What are the main differences between the standard and FATCA?
The standard consists of a fully reciprocal automatic exchange system from which US specificities have been removed. For instance, it is based on residence and unlike FATCA does not refer to citizenship. Terms, concepts and approaches have been standardised allowing countries to use the system without having to negotiate individual Annexes. Unlike FATCA the standard does not provide for thresholds for pre-existing individual accounts, but it includes a residence address test building on the EU savings directive. It also provides for a simplified indicia search for such accounts. Finally, it has special rules dealing with certain investment entities where they are based in jurisdictions that do not participate in the automatic exchange under the standard.
Under the single global standard jurisdictions obtain information from their financial institutions and automatically exchange that information with other jurisdictions on an annual basis. Part I of this report gives an overview of the standard. Part II contains the text of the Model Competent Authority Agreement (CAA) and the Common Reporting and Due Diligence Standards (CRS) that together make up the standard.
The Report sets out the financial account information to be exchanged, the financial institutions that need to report, the different types of accounts and taxpayers covered, as well as common due diligence procedures to be followed by financial institutions.
To prevent taxpayers from circumventing the CRS it is specifically designed with a broad scope across three dimensions:
• The financial information to be reported with respect to reportable accounts includes all types of investment income (including interest, dividends, income from certain insurance contracts and other similar types of income) but also account balances and sales proceeds from financial assets.
• The financial institutions that are required to report under the CRS do not only include banks and custodians but also other financial institutions such as brokers, certain collective investment vehicles and certain insurance companies.
• Reportable accounts include accounts held by individuals and entities (which includes trusts and foundations), and the standard includes a requirement to look through passive entities to report on the individuals that ultimately control these entities.
The CRS also describes the due diligence procedures that must be followed by financial institutions to identify reportable accounts.
See my academic blog for analysis of FATCA and the OECD Standards: http://profwilliambyrnes.com
@JustMe
It is a summary alright. The devil is in the details and the details are devastating :
http://www.thenewamerican.com/economy/item/17337-globalists-exploit-new-u-s-tax-law-for-world-taxation-regime
From William Byrnes website
“To prevent taxpayers from circumventing the CRS it is specifically designed with a broad scope across three dimensions:
The financial information to be reported with respect to reportable accounts includes all types of investment income (including interest, dividends, income from certain insurance contracts and other similar types of income) but also account balances and sales proceeds from financial assets.
The financial institutions that are required to report under the CRS do not only include banks and custodians but also other financial institutions such as brokers, certain collective investment vehicles and certain insurance companies.
Reportable accounts include accounts held by individuals and entities (which includes trusts and foundations), and the standard includes a requirement to look through passive entities to report on the individuals that ultimately control these entities.
The CRS also describes the due diligence procedures that must be followed by financial institutions to identify reportable accounts.”
“Developed by the OECD together with G20 countries, the standard calls on jurisdictions to obtain information from their financial institutions and exchange that information automatically with other jurisdictions on an annual basis. The OECD will formally present the standard for the endorsement of G20 finance ministers during a 22-23 February meeting in Sydney, Australia. The OECD is expected to deliver a detailed Commentary on the new standard, as well as technical solutions to implement the actual information exchanges, during a meeting of G20 finance ministers in September 2014.”
As Just Me told us a long time ago, FATCA begets …. GATCA
@Furious
Thanks for the link on Alex Newman’s lastest. I missed seeing that earlier, but knew he was writing one.
Infowars picked up the Alex newman story a minute ago.
http://www.infowars.com/globalists-unveil-socialist-backed-new-world-tax-regime/
Alex says,
Hopefully this will help bring some attention and interest to this finally!
and from FAQs re the IGA Canada negotiated with the US: http://www.fin.gc.ca/afc/faq/fatca-eng.asp
It’s pretty obvious that Harper is a globalist and not the least bit concerned with trifling little concepts like Canadian sovereignty. He has handed our foreign policy over to Israel and our economic policy over to the worldwide banking cartel. He is lockstep with the USA marching toward the NAU. He was vetted by the Bilderbergers prior to his ascension to the Canadian PM throne. FATCA to GATCA fits perfectly with his horrid vision of the world.
There has been grave concerns over what the G-20 gets up to for a long time now. Any time you have that many leaders going behind closed doors to decide outcomes irrespective of citizens needs, and wishes it spells trouble for the majority.
FATCA is a giant step in a long line of damaging stupidity they have got up to at the G-20. This global push for a very few to decide what will come for the masses is a staggeringly bad idea. The worst thing is all this so called “data sharing” It’s not just banking which is bad enough.
For the average person this gets more and more oppressive. Can’t protest anything or your name goes in a data base along with your photo to be “shared” around with god knows who but, most assuredly law enforcement even if such protesting is legal. They’ve created such an oppressive atmosphere that many people no longer want to speak out or ruffle any feathers. Add to this that they will now be able to access your banking information??
We’re all being treated as if we are sheep and if we are not sheep then we’re “in trouble”
I’m not kidding when I say I worry a lot at night about the world my son is going to be living in. The notion that one lives in a “free country” brings a lot of comfort…I’m not so sure there is much of that left these days with less and less freedom in the future for our kids. Oh sure you can work, go to school, shop *if you can afford to* but, don’t you dare challenge the authority of those making up these insane rules. Concentrated power is NOT a good thing.
It’s hard enough to speak up now. The more they “share data” the harder it will be for anyone to do anything except keep their head down and their mouth shut or else…isn’t that the sort of threat made from Treasury from day one regarding FATCA?? Say anything and you will be told you are an assumed criminal??
This GATCA thing and all the rest of this global plan for a few “leaders” to control everything is frightening. I don’t care for paranoia but, some of this is indeed worrisome when you think about how it is now already so bad and future generations. I’m not so sure right now that younger people aren’t being taught to just “go with the flow” because it’s “necessary” I recently read a report about this.
Fighting FATCA/GATCA has a lot more to do with the future of our freedoms than it does with any one individual situation. I hate the spied on feeling that is becoming an “international norm” these days.
@Attitcusincanada
I fear too many even here at Isaac Brock don’t understand the dimensions of GATCA, and think that would be OK since it is residency based, and would be a good a replacement for FATCA. NO IT WOULD NOT!!!!!!!! It is many times worse, and definitely represents why FATCA impacts EVERYONE!
I know there are a lot of folks that don’t like infowars. I have my issues with them too. Their fears are easy to dismiss as crack pots, until you watch what has been happening FATCA begetting GATCA. And, if you just read the OECD elites words, without comment or hyperbole, the story is clear to see.
Now, I remember the Bush years, and I remember the run to the Iraq War…
At the time, I had been reading the Project for a New American Century, (Web site now suspended) a Bill Kristol led think tank laying out their vision for America power and taking out Saddam to transform the middle east. They were known as the NeoCons, and everyone dismissed them as crackpot ideologues, until Bush started filling his administration posts full of them.
When my wife, who doesn’t follow things all that closely, said to me at the time the drums of war were on the U.S. media constantly, “They really aren’t going to invade Iraq are they?” My answer was, just read what the guys at PNAC have been saying over the years. Look at the signatures on the letters they sent to Clinton urging his intervention in Iraq. Look who is in the Administration. So, my answer was, ” Yes, they are!”
I have said it before, and I will say it again, the FATCAnatic ideologues have been on a mission just ike the NeoCons of the right in past. Clear in their direction, and certain of their mission.
We have had their words to show what they intend to do, via OECD pronouncements. With this administration, they got a willing partner, and FATCA was born in the stealth Hire Act closet. It is evolving into the benign sounding CRS (Common Reporting Standard) or the AEOI (automatic exchange of information). Whatever you want to call it, they point to FATCA as their model to copy, and GATCA is what they hope to impose on ALL of US.
The crackpots at infowars, which many of us would like to dismiss as it makes us uncomfortable to have them on the same side of an issue as ourselves, might just be right!
Brian at Tax Connections..
FATCA Is Old News… Here Comes GATCA