In a comment, Aussie Jones asks about Article 21 of the OECD’s Multilateral Convention On Mutual Administrative Assistance In Tax Matters, which states, in part:
Article 21 — Protection of persons and limits to the obligation to provide assistance
2. The provisions of this Convention shall not be construed so as to impose on the requested State the obligation:
a. to carry out measures at variance with its own laws or administrative practice or the laws or administrative practice of the applicant State;
b. to carry out measures which would be contrary to public policy (ordre public);
e. to provide administrative assistance if and insofar as it considers the taxation in the applicant State to be contrary to generally accepted taxation principles or to the provisions of a convention for the avoidance of double taxation, or of any other convention which the requested State has concluded with the applicant State;
f. to provide administrative assistance for the purpose of administering or enforcing a provision of the tax law of the applicant State, or any requirement connected therewith, which discriminates against a national of the requested State as compared with a national of the applicant State in the same circumstances.
The U.S. government clearly is not a fan of certain provisions of Article 21, but how helpful can these clauses really be to “U.S. Persons” living in other countries?
Generally accepted taxation principles
The U.S. Congress’ Joint Committee on Taxation staff made the following comments on Article 21 a few months ago. They don’t specifically mention PFIC and “foreign trust” reporting imposed on local retirement savings which host country parliaments think should enjoy simplified and not ridiculously-complicated tax & paperwork treatment, nor FBAR fines of 129 times the tax owed, but I’d bet whoever wrote these paragraphs certainly had those factors in mind when they wrote the following, which condemns the “generally accepted taxation principles” clause as “undermining” U.S. tax enforcement efforts:
The scope and operation of Article 21, as amended by the proposed protocol, accomplishes one of the goals of the OECD transparency standards, in establishing that a requested State cannot rely on bank secrecy or lack of a domestic interest as a basis for a refusal to exchange information, but adds other new potential arguments against exchanging information, based on the requested party’s interpretation of the domestic law of the requesting party. Under Article V of the proposed protocol, and Article 21 as amended, a treaty country is generally not obligated to take any action at variance with its domestic law, including disclosure of professional or trade secrets. That principle is limited by the rule that a treaty country may not decline to provide information on the ground that the information is held by a financial institution, nominee, or person acting in an agency or intermediary capacity.
The effect of this amendment is potentially undermined by the continued inclusion of language that permits a signatory to refuse to exchange information if the requested country determines that the domestic tax law of the requester is outside generally accepted principles of taxation. Thus, the requested country is permitted to make determinations about the merits of a Competent Authorities request based on its interpretation of the domestic law of another country. The Commentary includes a brief discussion of this limitation, to the effect that a rate of tax that is confiscatory or a penalty that is disproportionate to the offense may be considered to be outside generally accepted tax principles, and urges contracting States to consult with one another in instances when such a basis for refusing to exchange information is considered.
The Committee may wish to inquire whether the United States has had experience with application of the “generally accepted principles of taxation” standard in providing administrative assistance. Specifically, it may wish to determine whether similar language exists in any bilateral TIEA or exchange of information article of a tax treaty to which the United States is a party. Although the language was in the original Article 21 that is replaced by Article V of the proposed protocol, it may not have been invoked previously, because most jurisdictions with respect to whom the treaty was in force had a network of bilateral agreements on which they relied. For example, the Committee may ask whether there have been instances in which the United States refused to exchange information based on its view that the requester’s tax regime was outside the norms of the international community. Similarly, the Committee may wish to inquire whether any country or countries have rejected requests from the United States on that basis.
“Explanation Of Proposed Protocol Amending The Multilateral Convention On Mutual Administrative Assistance In Tax Matters”, pp. 26–27. Joint Committee on Taxation, 21 February 2014. Paragraph breaks and emphasis mine; footnotes omitted. They refer to a “brief discussion of this limitation” in “The Commentary”, which I reproduce below to save non-academic readers the trouble of citation-chasing:
197. Sub-paragraph e enables a requested State to refuse to provide assistance “if and insofar as it considers the taxation in the applicant State to be contrary to generally accepted taxation principles”. This might be the case, for instance, where the requested State considers that taxation in the applicant State is confiscatory, or where it considers that the taxpayer’s punishment for the tax offence would be excessive …
199. It is suggested that consultation between competent authorities should also take place whenever there is some doubt as to whether the taxation in the applicant State is of such a kind as to justify a refusal under the provisions of sub-paragraph e.
“The Multilateral Convention on Mutual Administrative Assistance in Tax Matters Amended by the 2010 Protocol”, pp. 82–83. OECD Publishing, 2011. DOI 10.1787/9789264115606-en. Emphasis mine. I omitted Paragraph 198 because it discusses the “contrary to the provisions of a convention for the avoidance of double taxation” limitation, which is not helpful for us thanks to our host countries’ surrender of sovereignty through U.S. tax treaty “saving clauses”.
If you find the above quote confusing, it may be helpful to replace “requested State” with your country (e.g. “Canada”) and “applicant State” with “the United States” in your head as you read it. I leave it to your imagination exactly how the U.S. Treasury & State Departments might threaten the “requested State” in those blandly-described “consultation[s] between competent authorities”.
Non-discrimination
The Commentary goes on to discuss the intent of the non-discrimination clause. As others (most recently Osgood) have concluded in the comments, both the OECD non-discrimination clause and the non-discrimination clauses in the U.S. bilateral tax treaties are likely to be non-starters for “U.S. Persons” outside of the U.S., so if you’re pressed for time or sick of reading bureaucratese, you’re welcome to skip to the end of this post.
200. Sub-paragraph f is designed to ensure that the Convention does not result in discrimination between nationals of the requested State and nationals of the applicant state who are in the same circumstances. In the exceptional circumstances in which this issue may arise, sub-paragraph f allows the requested State to decline a request where the information requested by the applicant State would be used to administer or enforce tax laws of the applicant State, or any requirements connected therewith, which discriminate against nationals of the requested State. Sub-paragraph f is intended to ensure that the Convention does not result in discrimination between nationals of the requested state and identically placed nationals of the applicant state.
Nationals are not identically placed where an applicant State national is a resident of that State while a requested State national is not. Thus, sub-paragraph f does not apply to cases where tax rules differ only on the basis of residence. The person’s nationality as such should not lay the taxpayer open to any inequality of treatment. This restriction should apply both to procedural matters (differences between the safeguards or remedies available to the taxpayer, for instance) and to substantive matters, such as the rate of tax applicable.
The OECD’s non-discrimination clause is focused on cases where the applicant State (e.g. the U.S.) is discriminating against a resident non-national (a Canadian expat in the U.S.) in favour of a resident national (a U.S. citizen); the Commentary specifically points out that it does not intend to cover discrimination between residents & non-residents.
However, various U.S. treaties have broader non-discrimination clauses which might be read to protect nationals of either party against discrimination by either government. Indeed, the U.S. is clearly worried that these non-discrimination clauses might affect their efforts to get a “requested State” to assist them in imposing requirements against a resident dual national (a Canadian citizen in Canada with “clinging U.S. nationality”) in a way that does not apply to a resident single national. As such, some of their bilateral treaties have a second saving clause about the definition of “identically placed”, in addition to the more-widespread one stating that they may tax their citizens as if the treaty did not exist. For example, from the 1982 treaty with New Zealand:
Article 23: Non-discrimination. Citizens of a Contracting State shall not be subjected in the other Contracting State to any taxation or any requirement connected therewith which is more burdensome than the taxation and connected requirements to which citizens of that other State in the same circumstances are or may be subjected. This provision shall apply to persons who are not residents of one or both of the Contracting States. However, for the purposes of United States tax, a United States citizen who is not a resident of the United States and a New Zealand citizen who is not a resident of the United States are not in the same circumstances.
The non-discrimination clause (Article XXV) in the Canada–U.S. treaty, and the U.S.’ interpretation of it as laid out in the “Technical Explanation” of the 2007 Protocol, is far more complicated; I won’t try to unravel it here, but I’ll just end with this quote from the Technical Explanation:
Whether or not the two persons are both taxable on worldwide income is a significant circumstance for this purpose. For this reason, paragraph 1 specifically refers to taxation or any requirement connected therewith, particularly with respect to taxation on worldwide income, as relevant circumstances. This language means that the United States is not obliged to apply the same taxing regime to a national of Canada who is not resident in the United States as it applies to a U.S. national who is not resident in the United States. U.S. citizens who are not resident in the United States but who are, nevertheless, subject to U.S. tax on their worldwide income are not in the same circumstances with respect to U.S. taxation as citizens of Canada who are not U.S. residents.
The State Department, the Treasury Department, and the Senate know exactly what they are doing when they use these treaties to buffalo other countries into accepting the extraterritorial asset reporting with heart-stopping fines that the Homeland imposes on the American diaspora in the name of “horizontal equity”, and they have known for decades. They know that what they are doing would be regarded as discriminatory if they did not make sure the letter of the law went directly against the spirit of the section headings. You take the risk on yourself and your family if you accept their pleas of good-faith ignorance and claims that you should just sit tight while they make all efforts to fix the situation.
@Article 21 and poster Eric
Thank you for this comment. Particularly ” As such, some of their bilateral treaties have a second saving clause about the definition of “identically placed”, in addition to the more-widespread one stating that they may tax their citizens as if the treaty did not exist.”
This is very important information – I will be checking the treaty for my country and suggest others in various counties do the same. Note that any EU member countries may be affected by some EU treaty, although I do not believe there is – yet – an overriding EU/US tax treaty – anyone know?
Allou, there is no such treaty. The EU has no competence in the area of direct taxation, which is in the hands of individual member states.
Great find by Aussie Jones, thank you, too, Eric. I wonder if this could also help out all those Americans abroad with PFICs, especially those whose privatized state pension plans pretty much required them to put their money into passive foreign investment corporations, such as Mexico prior to 2010. What is more confiscatory than a regime that makes all of your capital gains for the past twenty years disappear even before you have counted in the paperwork costs?
Reservations are here and are interesting;
http://conventions.coe.int/Treaty/Commun/ListeDeclarations.asp?NT=127&CV=1&NA=&PO=999&CN=999&VL=1&CM=9&CL=ENG
Some OECD notes on penalties;
http://www1.oecd.org/daf/mai/pdf/eg2/eg2963e.pdf
@Eric
Fantastic piece of research and good job finding that report from the Joint Committee on Taxation. I had a look through this report and noticed the following:
At first glance, this appears to rule out collection requests from the United States under this treaty unless they remove their original reservation.
Does anybody know what is going on in Mexico? There are an awful lot of expats there. What is the Mexican government`s stance? They have been trying to get information on drug cartel accounts in America for decades.
@Osgood, Should we call you 8 of 9 of the Brock Collective. 🙂
Here is a link to the Senate ratification on those provisions;
http://thomas.loc.gov/cgi-bin/ntquery/D?trtys:2:./temp/~trtysTnCXAK::
I have been thinking about this for a long time and now the question has been answered.
So basically, most expats who have made a life in a new land, who will never ever return to the homeland, who have no assets in the homeland, can sleep in peace. Agree?
The part where they worry about interpretations of foreign tax law is rich coming from the government whose recent Lacey act persecutions are based on some exceedingly dodgy interpretations of foreign laws. See, for instance, what happened to Gibson guitars cos the US thought they used an inappropriate export code on some wood from India, something which did not bother the Indian government one bit.
@Polly
Oddly, there hasn’t been much in Spanish on FATCA since January at least. There is quite a bit more in Asian languages (which I will leave to Eric) and Russian. There has been worryingly little from Mexico. My trawl today, though, indicates that some Latin Americans are starting to think along Brock Society lines.
There was a particularly interesting story from Argentina suggesting that the only way that it can legally comply with FATCA is if it is really bilateral.deal, which Argentina realizes is not on the table and which cannot be negotiated in the time remaining. Interestingly, this article mentions the recent OECD agreement and the convention of 2010, but suggests that the U.S is not under that umbrella.
http://www.iprofesional.com/notas/186782-El-BCRA-dict-la-norma-para-que-bancos-informen-a-clientes-extranjeros.
There was also a really angry story from the Dominican Republican with below the line comments that could have been made by Spanish-speaking Brockers.. There are lots of Dominican immigrants in FATCA author Charles Rangel’s district and his opponent in the upcoming 24 June primary immigrated from the Dominican Republic as a child. This could get interesting.
http://www.almomento.net/articulo/162851/Causa-espanto-nueva-ley-impositiva-EEUU
Not sure whether there is really very little debate in Latin America or whether it isn’t taking place on the internet.
@publius
Is it possible that America isn’t so interested in FATCA with them? Because of their future demands for reciprocation? Because as far as we know- Florida banks are very afraid of the withdrawal of a lot of money due to FATCA…..money from further south.
Strange- but Mexico must have a lot of expats and I cannot imagine they are not also having their “oh my God” moments too.
I don’t speak spanish so I can’t research that. It would seem to me that Isaac Brock should have a growing number of participants, also from there? Where are they and what are they thinking, I wonder.
@Eric, can you append your post with the information from Osgood which is extremely powerful and changes the whole dynamics of this.
@Brockers. Has the US been blowing a whole lot of smoke and engaging in optical illusions?
Why would anyone with non-US nationality, living in their home country, paying all their resident taxes, who has no interest in ever stepping foot in the US, submit themselves to OVDI ?
I had been under the misimpression that the OECD document would provide for all kinds of collection reciprocity. But the reality is that because the US does not engage in collection under the reservations, no one else will collect for them. Besides that there are many countries like Canada and Ireland who fully opt out of any collection assistance.
http://conventions.coe.int/Treaty/Commun/ListeDeclarations.asp?NT=127&CV=1&NA=&PO=999&CN=999&VL=1&CM=9&CL=ENG
@Brockers. Am I reading all this wrong? Or is the tiger without teeth and claws?
There is no way the US Senate will get a 2/3 vote to revoke the prior reservations.
Regarding FATCA :
http://www.thenewamerican.com/usnews/constitution/item/18253-critics-mount-constitutional-attack-on-dreaded-fatca-tax-regime
From the Article:
Faced with what even compliance mongers have said would be a “train wreck” on July 1, the day full enforcement of FATCA was supposed to begin following previous unilateral delays by the Obama administration, the IRS and the U.S. Treasury recently announced a “transition period” extending into 2015. According to the opaque announcement, the federal government will delay imposing harsh penalties on banks for now — as long as authorities believe they are trying in “good faith” to comply with the byzantine new tax regime. In other words: more lawlessness.
If opponents of the scheme get their way, however, it may all be a moot point. Attorney Jim Bopp — described by analysts as a “superlawyer” for his role in the Supreme Court striking down other unconstitutional statutes such as McCain-Feingold — announced that he was taking up the case. In an interview with the Washington Times and other statements, Bopp, who is working with the group Republicans Overseas to kill the scheme, outlined three primary constitutional problems with FATCA and the related Foreign Bank Account Report (FABR).
“It is our preliminary opinion that the potentially meritorious claims are a violation of the treaty power, an 8th Amendment Excessive Fines Claim, and a 4th Amendment Search and Seizure Claim,” Bopp said in a statement posted online by Republicans Overseas. “We do not believe that a claim based on an unconstitutional delegation of Congressional power has merit. We believe that these three claims form the basis for a successful suit that would stop the damage that FATCA and FBAR have inflicted on U.S. citizens.”
First of all, because the Treasury is unilaterally signing unauthorized pseudo-treaties with foreign governments to violate privacy rights, the Senate’s constitutionally mandated role in ratifying treaties has been usurped. Numerous other experts have made the same argument, as The New American magazine reported in a major report on FATCA published last month. Already, without any purported authority to do so from the Constitution, or the FATCA statute itself, dozens of such “agreements” to gather and share private financial information have been signed with foreign rulers.
According to Bopp, the FATCA statute also violates two of the unalienable rights enshrined in the U.S. Constitution. Under the Fourth Amendment, privacy is supposed to be protected and the government needs a warrant to infringe on it. FATCA, though, takes the opposite approach, indiscriminately gathering sensitive information on everyone in an NSA-style dragnet for perusal by authorities. Multiple foreign governments have been coerced by the Obama administration to undo their own protections for privacy rights in an effort to comply with FATCA.
Finally, the Eighth Amendment prohibiting cruel and unusual punishment, as well as excessive fines, might also represent a viable avenue for challenging FATCA and related schemes. Under the emerging tax regime, Americans abroad who for whatever reason have not complied perfectly with unimaginably complex IRS demands can be hit with crippling penalties and fines that in some cases could literally threaten the life savings of entire families. Critics say that must end; and experts believe the courts might be inclined to agree. Most U.S. expats were not even aware of the purported IRS requirements that now threaten their financial survival.
“The U.S. Constitution protects every citizen’s liberty and freedom, while FATCA undermines both,” Bopp was quoted as saying by the Washington Times last week in an article about the legal challenges. “This astonishingly bad law manages to thumb its nose at the Constitution.” Indeed, more than a few analysts have actually described FATCA as potentially the “worst” tax law currently on the books — and it has not even gone into full effect yet, though Americans overseas in particular are already suffering from it.
Leaders in the fight against FATCA vowed to take the challenge all the way to the Supreme Court if needed. “Seeking legal rather than legislative remedy on behalf of Americans living abroad before the scheduled July 1 full implementation of the law is the only available course for now,” Republicans Overseas leader Solomon Yue told the Times. He is also a member of the Republican National Committee, which adopted a resolution advocating repeal of FATCA for a wide range of reasons.
“FATCA violates citizens’ right to privacy,” Yue explained in an interview with a Swiss financial publication. “Personal financial data transferred from foreign banks to the IRS violates the Fourth Amendment which prohibits unreasonable searches and seizures without a warrant. However, even living abroad, a U.S. citizen still is protected by our Constitution. Using an IGA (Intergovernmental Agreement) between the U.S. government and a foreign government as a license for a warrantless search is unconstitutional.”
He also blasted the executive branch’s usurpation of power. ”
Now WHY is OUR government not taking this view?
Spineless? Pantywaists? Ignoramouses? Pawns of the Banks?
Or ALL of the above?
Why are they trying to rush this obvious illegal IGA through our parliament hidden in Bill C-31?
@furiousac
WOWSERS!
Hooray!!! ( and a “super lawyer” to protect the Constitutional rights. Finally!!!!)
And Speaking of the OECD:
From the Article at The New American by Alex Newman:
“Perhaps even more alarming is how self-styled international “authorities” have seized on FATCA to erect a new global tax regime. Both the Organization for Economic Cooperation and Development (OECD) and the G-20, which includes ruthless dictatorships and gangster regimes, have joined forces to create what is being dubbed by analysts GATCA, or the Global Account Tax Compliance Act. Their socialist-backed plot is admittedly inspired by, and modeled on, the new FATCA regime. The potential for disaster is gargantuan. ”
http://www.thenewamerican.com/economy/item/17643-globalists-unveil-socialist-backed-new-world-tax-regime
“As various tax-funded international institutions explicitly outline plans to plunder humanity’s wealth to prop up governments drowning in odious debts, the Organization for Economic Cooperation and Development (OECD) last week officially unveiled a new socialist-backed plot to create a global tax information-sharing regime to ensure that nobody except the establishment escapes the upcoming fleecing. Under the proposed scheme, admittedly inspired by “FATCA,” the Obama administration’s latest addition to the sprawling U.S. tax regime, governments and dictatorships worldwide will automatically share all private financial data on citizens with each other to extract as much wealth as possible from the public.
Calling its scheme to put the final nail in the coffin for financial privacy “game changing,” the tax-funded OECD said it would require governments to collect massive amounts of sensitive personal information on individuals from banks and other financial institutions in their jurisdictions. Once gathered, the vast troves of private data would be automatically exchanged between all participating governments and dictatorships. “You collect the data, you put it in the pipe and it goes to the other party,” said OECD tax policy boss Pascal Saint-Amans, who pays no taxes on his bloated tax-funded salary”
“Over 40 governments, which the Paris-based OECD misleadingly refers to as “countries,” have already committed to adopt the controversial scheme. In a “joint statement,” participating governments celebrated the plot, which they believe will help extract more revenue from the public”
“We therefore strongly support the development of the single global standard for automatic exchange of information between tax authorities.”
In fact, the OECD even boasts of its collaboration on the plot with tyrannical socialist regimes famous for human rights abuses and in some cases, even mass murder. “Working with partner countries (including Argentina, Brazil, China, India, the Russian Federation and South Africa), the OECD is advancing rapidly in the development of a common model for reporting and automatic exchange of certain account information held by financial institutions, including due diligence rules, reporting formats and secure transmission methods,” the outfit explained before releasing the actual plan on February 13.
A senior OECD bureaucrat claimed that the Obama administration had also committed to “early adoption” of the new world tax plot,
A senior OECD bureaucrat claimed that the Obama administration had also committed to “early adoption” of the new world tax plot, though experts and analysts have pointed out that the U.S. president has no lawful authority to follow through on such a pledge without approval from Congress.
And just WHAT is in this global tax plot:
When you read it it makes the hair stand up on your head and everywhere else!
Just think of it: EVERY detail of your life, financial and otherwise will, under the OECD rules to be implemented in Sept. of 2014 , be sent to very questionable characters , some of whom are thugs and murderers.
Under OECD implementation, you have NO place to hide. EVERY person on the planet will be forced to send all their information be it individual, company, corporate, whatever it is, they demand it. What you ate for breakfast and where you dined last night are also not excluded from their prying eyes. Once obtained, they intend to use that information to heap heavy and harsh penalties for the flimsiest of reason, or no reason at all. They actually say they LOOK forward to being able to inflict penalties, and the harsher the better.
THIS is what we have to look forward to with OECD.
It makes me wonder if THIS is why Canada is so sheepish in their adherence to FATCA. Because they KNOW what is coming. OECD guidelines and rules ( ratified by 40 countries in Feb. of 2014 after a Jan. 17, 2014 meeting) are often mentioned in the IGA Implementation proposal.
Without stronger opposition in our Canadian Parliament and the Privacy Commissioner against this assault on our freedoms and privacy are we to have to look to Mr. Bopp and Constitutional lawsuit for our relief?
Really?
I have been so proud of Canada. Now?
From the Article:
“Developed at the behest of the G-20, a group of the most powerful governments and tyrants including the barbaric communist dictatorship ruling mainland China, supporters of the new tax regime are demanding that it be in effect by 2015. Finance bosses for G-20 powers are expected to sign off on it later this month at a meeting in Australia. With the unaccountable bureaucrats almost always more than happy to trample individual rights and siphon more wealth out of the productive sector, little to no official opposition is expected. Plus, powerful socialist forces and tax-funded “non-governmental organizations,” so-called, are already working overtime to make sure the scheme moves forward.”
As I recall, OUR Finance Minister attended and this was signed.
Finally :
From the article. (Read the whole thing, it is mindboggling!)
“The repercussions of the OECD scheme for Americans and people around the globe — especially when it comes to financial privacy and economic freedom — will be crushing, experts argue. Among other problems, supporters of free markets and tax competition point out that the global taxation scheme aims to crush inter-jurisdictional competition, a key historical factor contributing to better policies and lower taxes. Analysts also say the end goal is the creation of a planetary taxation authority, which globalists have been foaming at the mouth to foist on humanity for decades.
Of course, the staggering financial costs of implementing the new regime to abolish financial privacy worldwide will ultimately be paid by the victims of the scheme: consumers and taxpayers forced to pay higher prices and more taxes to have their rights trampled on. Perhaps the most troubling aspect of the scheme, however, is that it comes on the heels of openly declared plots to fleece humanity under the guise of propping up debt-laden bloated governments that borrowed trillions of dollars to bail out big banks and other cronies amid the economic crisis.”
And let us not forget that our own government inserted a “bail in” to the budget bill in LAST years budget.
From the Article:
“A recent IMF report, for instance, called for a “one-off tax on private wealth,” but noted that measures such as capital controls would have to be adopted prior to the plundering to ensure that nobody could escape. As multiple analysts have already pointed out, there will, of course, be more than enough loopholes in the new world taxation regime for the truly mega-wealthy members of the global establishment to protect their own ill-gotten wealth from outright confiscation. The rest of humanity, however, will suffer the consequences if the brakes are not slammed on the scheme very soon.”
Global Confiscation of bank accounts outright. ALA John Corzine!
Capital controls are right now implemented in at least two mega banks in the US with more to come.
@FuriousAC, @Brockers;
Here is a link to the GATCA language;
http://www.oecd.org/ctp/exchange-of-tax-information/automatic-exchange-financial-account-information-common-reporting-standard.pdf
Trying to find something nice to say about it, its better than FATCA and is resident based. No doubt the US will only sign with “reservations” lodged.
But this will require 2/3 of the Senate and I think FATCA has doomed GATCA in the US.
@All;
But the same thought applies to GATCA as FATCA.
Because the US opted out of the mutual collection clause of the mutual collection oecd treaty as Osgood shared with us, what difference does it make if any information went to the US?
If you relinquished, undocumented or documented, and never ever plan to visit the old country, there is no mechanism to impoverish you.
@George:
Your comment:
“If you relinquished, undocumented or documented, and never ever plan to visit the old country, there is no mechanism to impoverish you”
When OECD implements in Sept of 2014 ( G-20 countries have already signed on) they will have the ‘mechanism’ to impoverish everybody on the planet, even if you never set foot outside your own door!
One of the main reasons they advocate residency based. Because to them it matters not WHERE you live as long as planet earth is your home (and I would suspect they have a scheme for those who plan a one way trip to Mars!)
@George:
Your Comment:
“No doubt the US will only sign with “reservations” lodged.”
US taxpayers, to the tune of over 100 million dollars , have paid for the OECD to set up their global tax scheme (at the behest of the G-20) and it’s proponents pay NO tax on THEIR salaries while they plot and plan to fleece the entire planet.
All the links below regard FATCA and GATCA and OECD:
http://www.thenewamerican.com/world-news/item/17986-the-dark-road-the-worst-tax-law-you-ve-never-heard-about
http://www.thenewamerican.com/world-news/item/17987-a-new-world-tax-regime
http://www.thenewamerican.com/usnews/constitution/item/17877-obama-bypasses-congress-to-foist-imperialist-tax-plot-on-world
http://www.thenewamerican.com/economy/item/17868-obama-tax-scheme-could-destabilize-banks-spark-economic-crisis
@FuriousAC.
I have just read the GATCA document, link above……
That document has no separate collection mechanism.
So we have to look at “Multilateral Convention On Mutual Administrative Assistance In Tax Matters.”
In that agreement, the USA has reserved that it will not assist in any tax collection. So that means no other country on earth will aid collection of US taxes in their respective country.
Several countries, Canada and Ireland have stated their reservation with lodging/signing that agreement and that is they will not assist in collections.
So yes, there is reporting but no collection mechanism.
I am not being a shill for OECD but if I had to pick between FATCA and GATCA, the choice is clear.
Under GATCA my financial information is going nowhere.
@George
It does seem that (at the moment), the only persons at risk of having their governments collect on behalf of the US due to alleged tax claims are those that live in countries that have an “assistance in collection clause” in their bi-lateral DTA with the US. (Sweden, Netherlands and a few others?)
The wording in the report cited above seems fairly clear, but I am no tax lawyer and I wonder if anyone else here would be able to offer an opinion on how “binding” the ratification process is if a country reserves against collection.
FInally, this GATCA/CRS/OECD stuff is in its infancy and developments need to be watched closely on how this unfolds. As we know, governments have a tendency to bury these agreements out of sight which makes it difficult to keep track of what they are up to.