46 thoughts on “President of Taiwan vows to resign if stung by FATCA Green Card sting”

1. It’s amazing and disappointing how thoroughly Taiwan has been distracted by this circus sideshow about Ma’s green card. (Warning: massive post-length rant follows.)

   I’ve seen estimates that there’s as many as three or four hundred thousand U.S. citizens & green card holders in Taiwan: proportional to total population, about half as many as in Canada. That’s the highest in Asia (compare South Korea, which has fewer than half as many in a total population twice as big). And unlike in Hong Kong or the rest of Asia, the overwhelming majority are returnees rather than expats: they speak the local language fluently and know how to lobby politicians and put their case to the public. And it’s one of the only places in Asia where native-born private citizens have no legal restrictions on holding dual citizenship.

   Yet with all these favourable conditions, there has been almost no organised opposition to FATCA. Nothing remotely on the scale of what you all have in Canada. The pro-big business types on the ruling KMT side made sure to push for an IGA as hard as possible. The opposition is too busy chanting “Ma Ying-jeou has a green card! Diane Lee had a U.S. passport! Impeach them all and send them to the IRS! FATCA is great!” (While ignoring everyone on their own side of the political spectrum who also kept green cards buried in their sock drawers.) And none of these government idiots gives a damn about the impact on ordinary constituents, who have been writing letters about this issue to all these politicians to absolutely no effect.

   And then there’s the endless droning of the Compliance-Industrial Complex and local investment advisors trying to promote investment in the U.S., churning out articles like this to try to portray everyone with FATCA problems as “rich people avoiding taxes”, and to conflate the two separate issues of non-resident aliens who invest in the U.S. (and thus pay taxes on U.S. source income) and non-resident citizens who don’t earn money in the U.S. but still pay taxes on all global income, in order to conclude that “how is it strange at all that a Taiwanese person has to pay tax to the U.S. government?”

   If FATCA were a mainland Chinese law rather than a U.S. law, and President Ma had signed up to implement it in Taiwan, the opposition would quite literally be invading government buildings right now, just as they did two months ago in response to a proposed free-trade agreement with China. There might would even be someone desperate and disturbed enough to send bombs to government offices in an attempt to assassinate those involved with implementing the law, the way one currently-sitting Taiwanese opposition politician did back in the 1970s.

   But since it comes from the U.S., all they can do is cheer it on and pretend that it’s another example of international recognition for Taiwan’s sovereignty because they got to sign an agreement with another government just like grown-up countries do, and they can even pretend it’s a treaty and send it through the legislature for a vote though of course their “partner” certainly isn’t doing that. I will be very curious to see how these same clowns will respond five or ten years down the road when Beijing comes knocking on the door and makes the same demands for tax information & tribute about which the opposition are so enthusiastic when it’s the U.S. doing the demanding.

2. @Eric:
   It won’t take 5 or 10 years!

3. One other interesting-but-probably-irrelevant wrinkle here is that whatever Ma Ying-jeou’s own “U.S. Person” status, his daughter Lesley Ma is without a doubt subject to FATCA: she was born in the U.S. and probably isn’t in a position to give up her U.S. citizenship, because she resides in Hong Kong. (Hong Kong does not recognise Taiwanese passports, she hasn’t lived here long enough to qualify for an HKSAR passport, and even once she has, there’d be massive outrage if she applied — just look at how the opposition reacted to Lung Ying-tai & Fung Ming-chu for merely holding Hong Kong permanent identity cards.)

   If Lesley Ma were in Taiwan, the banks or the “competent authority” could shield her from U.S. tax demands. But instead she’s in Hong Kong, where, formally speaking, she is nothing more than a private individual. (Informally speaking, I’d imagine that the “United Front” types here in Hong Kong are filled with glee that she has been co-opted into a minor respectable member of the local establishment, but still that’s far distant from the minimum threshold that might lead them to consider taking measures to protect her from FATCA.)

4. @Eric: All true.

   Taiwan is a Yankee running dog and they will take it in the a** from bathhouse Barry just like all the other countries.

5. Pingback: 2014 Green Card Program Tips

6. @Eric
   Now that it has been widely reported in Taiwan that greencard holders need to file U.S. taxes, do you get the sense that people are having OMG moments at all? .

   I was wondering whether Taiwan would be hardhit by the crackdown because of controlled foreign corporation rules? I know that its original industrial catch up was greatly aided by Taiwanese who returned to Taiwan after being in the U.S. for more than eight and set up corporations in Taiwan. Does this sort of thing still go on now? Are returning Taiwanese still highly entrepreneurial? How well informed are they likely to be?

   If I ran a government economic department, I would make sure that my greencard holders and U.S. citizens were very aware of the U.S. tax rules, since the rules regarding CFC’s is astoundingly harsh. Admittedly, the U.S. has Taiwan over a barrel because of Taiwan’s security problems, but it sounds like Taiwan isn’t even limiting the damage.

7. Here is the link from the US embassy letter to Ma. It only refers to “abandonment”, not renunciation or relinquishment. Does that mean we can all say we abandoned US personhood also?? So relinquishment or renunciation is no longer required?

   http://www.nownews.com/p/2014/05/15/1235027

8. How could he be ashamed for something he did not know he had to do?
   Instead, he should be furious at US personhood CBT and FATCA, void that non treaty IGA, and call the US bluff on the 30% threat.
   Nonsense.
   I wonder when we’ll see countries diversifying outside of US investments and hear US banks screams.
   There’s been rumors of some countries limiting their investments, but I bet they’re doing it slowly. Nothing really noticeable on a big scale.

9. Scenario : Indonesia tells Obama to use military intervention in East Timor. Obama must also resign as president of the United States because as a citizen of Indonesia he is subject to the laws of Indonesia: http://isaacbrocksociety.ca/2012/01/21/what-if/

10. Who do these guys think they are. I am talking about U.S. Government. The House of Representatives originated this insane scheme, The U.S. Senate voted to make it law and the president signed it. Politicians from both parties were and are in favor of worldwide taxation, of anyone they can find with a remote chance they are any kind of resident or citizen.
    I’ve heard it all. Millionaires are leaving for tax havens and whose fault is that? It is the politicians trying to tax us into prosperity, so they will have more money to allot to their cronies hoping a share will find its way back to them disguised as ”campaign contributions”. Look, you can call it whatever you want, but a bribe is a bribe, is a bribe.
    It appears the only way we get rid of the perverted tax code is to throw every current politician out and start over. The Tea Party started by not going along with the establishment corrupt politicians but some have given in to the ”go along to get along” mentality.
    There has been a bill introduced into the House Ways and Means Committee, every year since 1999 to scrap the current taxing system and enact the FairTax which briefly would;
    1. Repeal the 16nth amendment that allowed the Marxist idea of a progressive income tax.
    2. Disband the hated IRS, who cannot keep their hands off Politics as require by law.
    3. Repeals all Federal Tax Laws and makes the FairTax the only tax law they have. ( strictly a territorial tax not an ”all roads lead to Rome” mistake.)
    4. Stops the drain of companies leaving the U.S. and makes us a capitalist haven for the worlds billionaires. (Yes we want and need capitalist billionaires. Who in this country has been hired and paid well by a poor person?)
    5. Takes away the ”K” Street lobbyists, who funnel the money to politicians to amend the 80,000 page tax law favoring one or another big client, who can reduce their taxes by the well know method. (An average of 4 a day bills, get passed to help reduce their taxes.)
    LISTEN UP FOLKS—-INSTEAD OF DESCRIBING THE PROBLEM AD NEAUSIUM. LEARD ALL THE FACTS ABOUT THE FAIRTAX AND CONCENTRATE ON IT AND IT ALONE AND IT WILL BE MADE LAW AND SOLVE ALL THOSE PROBLEMS YOU WRITE SO PASSIONATELY ABOUT.

11. Hi Mr. Tidwell: I don’t give a damn how the US taxes its own Homelanders. So the question of fair tax or income tax really only matters to Homelanders. So I for one am not going to start lobbying for “fair tax”, because I don’t live in the US and I don’t care. Besides, I don’t have a vote in the US and even if I did I would still have no representation.

    Besides our problem is not about whether the US has income tax or fair tax. It’s about whether the US thinks that it is the slave owner of its alleged citizens abroad. It’s about whether our pansy ass politicians here in Canada and elsewhere are just going to lay over backwards and yield to US extortion.

12. Interesting! Surely this type of political teacup tempest does give publicity to the risk of having a green card and do further damage to the U.S. Dream! While I appreciate Eric’s rant, I can’t help but think that this help makes the case IBS has been making for a long time now.

13. Just a reminder for all Canadian who ever had a Green Card and reside in Canada you are not US person according to Canadian government.
    ” I hold a U.S. green card. How does this affect my tax residency?

    If you are a green card holder (that is, a lawful permanent resident of the U.S.), the U.S. considers you to be a U.S. resident.

    However, if you are a resident of Canada for tax purposes and do not hold U.S. citizenship, you should not identify yourself as a U.S. person to your Canadian financial institution.”
    http://www.cra-arc.gc.ca/tx/nnrsdnts/nhncdrprtng/ndvdls-eng.html

14. @Wilton Tidwell 
    As a “homelander” I take your point. BUT…The sad reality is, that absent a revolution or total collapse of the ruling establishment, it isn’t going to happen! Politicians aren’t going to give up their major source of campaign funding, and the public is too distracted with pop culture, entertainment, and sports to care. Just look at report after report that comes out from the TIGTA about the IRS waste and incompetence and nothing happens! There is no public outrage or call for change like this recent story should elicit. Has the acronym ‘EITC’ fraud ever passed through the lips of Brian Williams on the 22 minutes of NBC nightly “world” news my mother watches?

    http://m.washingtonexaminer.com/irs-program-hands-out-billions-in-bad-payments-for-earned-income-tax-credit-watchdog-finds/article/2548368

15. i personally know of a number of Canadians who moved to the U.S. as adults and spent many years working there under a Green Card. They never became U.S. citizens.

    When they retired and moved back to Canada, with a U.S. pension and Social Security, they did not renew their Green cards. Naturally, they assumed, as their Green cards were not renewed and now invalid, they no longer had any filing obligations to the U.S. There was nothing in any IRS publication at the time ( 1990’s) to indicate that until the Green card was officially turned in, filing obligations remained.

    A few years after returning to Canada, these individuals received demands from the IRS to file U.S. 1040s The IRS was called a few times and the agents said (incorrectly as it turned out), to just send
    back a written reply to the demand explaining that the Green card was no longer valid.

    The Canadians did just what they were told and wrote to the IRS. The reply they each received was exactly the same. All they received was the same demand to file a return with no further explanation.

    They all started filing U.S. returns again at some cost, but always received refunds.

    It wasn’t until much later that they learned about I-407. Several went to a U.S. consulate to hand in their long expired Green cards. At least one person handed it in when crossing the border for a trip to the U.S.

    They then had to go through the whole process of completing 8854 and a dual status year return at considerable expense.

    The whole situation was absurd. But we all know that!

16. Hazy
    Best advice for Green card holder, who left USA years ago, do not cross the border, if they have any assets. They can not touch you in Canada and how much do you you want to pay for a visit to USA.

17. I would suggest these Green Carder get a record from CRA when they returned to Canada. If it was before 1986, it would be even more helpful. That was when the rules about dual citizen changed regarding giving US state department formal notification. You can assume, that it probably applied to Green Card holders as well.

18. Can someone who has the ability to post a thread. post a sticky thread so that Canadian Green card holder know they have a get out of jail free card for FATCA.

19. I guess it’s time for me to chime in here…. As a long term American expat living in Taiwan let me shed some much needed light on the political and other issues surrounding this… Gonna be long, sorry…

    At present Ma has about a 7% support rating, at this moment he can’t do anything right. No one trusts him, and he’s a president that rarely if ever listens to anyone. He marches to the beat of his own drum and he’s made the masses angrier. Look at the massive protests here against the cross strait free trade agreement a month or so ago…

    There are approximately 200,000 US persons in Taiwan, 99% of them locals with dual nationality; if anyone has reference to a real number I would greatly appreciate them providing it. The number above was giving by another IB contributor last year.

    I agree that Taiwan has more American greencard or passport holders than many other countries, and frankly I have no idea how that happened. But, it is interesting to note that most people in Taiwan have no idea about FATCA. Not one person I’ve spoken to over the last year has heard of it.

    Politicians in Taiwan all have greencards, at least it is suspected that they do… they are supposed to renounce or give up their dual nationalities before elections, but as AIT does not reveal the information the public often wonders who’s telling the truth… These politicians are worried about China, they think they can escape t the US, and many of them have US connections, property, or family in the US. 5 out of every 10 locals I meet here have some sort of US relative, it is astonishing.

    Eric is right, basically there has been no opposition to FATCA here at all. It boggles the mind. In phone calls to the Financial Supervisory Commission, as stated in my letter to the editor to the China Post on May 3, http://www.chinapost.com.tw/commentary/letters/2014/05/03/406741/FATCA-to.htm, they told me that FATCA is a US domestic law and told me if I email them again they would send my email to the IRS and AIT. (AIT means the American Institute in Taiwan —- for those that don’t understand the history, Taiwan has no formal embassy as the US changed its defacto embassy to Beijing in 1975.). Only 20 countries formally recognize Taiwan, all tiny little islands no one has ever heard of… anyway… The FSC, in a phone call last year off the record told me they knew it was a bad law, but this year refused to clarify their position nor give any details. Each of the three letters I sent to them was no more than 3 lines long. They got tired of me bugging them and don’t want to deal with it.

    With the protests last month, the Legislature is about 300 bills behind, FATCA being one of them, however, bank friends tell me it will be basically added to the list in June. Let’s see how this plays out.
    The KMT and DPP both seem to be oblivious to this law, and don’t really care… You see… In Taiwan people with US citizenship or Greencard status are considered privileged by those who do not have it. So, those people with dual citizenship may not want to speak out in fear of being protested against. As banks need to pay out that 30% withholding if Taiwan doesn’t sign the law people here stand to lose much more than if they sign it, so they think… As the media is not reporting accurate information, as they have no accurate information, people can’t truly understand how bad this is. And I suspect that this is going on in many counties. So to the locals, FATCA is probably considered a great way to force these dual citizens to pay their taxes, making the local people feel better. Rich people here have caused housing prices to become the world’s most expensive in a span of about 5 years. Those people in their 20’s right now will NEVER be able to afford a house, at least not in any big city. Salaries are low and so… those with status, such as having a US passport, are considered wealthy and the enemy.
    It is true that the government here seems to be uncaring towards normal citizens and thus the protest against the China FTA last month. Though they think the TPP with the US is great! Hmmmm. So US bullying is ok, but China bullying is not. As Eric touched on as well.
    I suspect now that this presidential fiasco is FINALLY going to get some media attention here, let’s see how many renunciations there are from Taiwan alone in the next month! Though many people here have already renounced I believed.

    As for Ma having a Passport, greencard or whatever, he said in his first term that he had given it up, but of course there is no way to prove that. Obama provided his birth certificate, though people still don’t believe he was born in the US, and for the president of Taiwan to prove he really gave up his citizenship, I would love to see the local people try to force him to show proof of this, and once he does, and he won’t, the people won’t believe it anyway. So does he have a greencard? I have no idea. But I speculate that perhaps he failed to file his US taxes prior to either giving up his US citizenship or having his Greencard expire, as 99% of Americans abroad are not compliant, he could be one of them…

20. nofatcataiwan
    Has the government given a get out of jail free card for Green card holder like in Canada?
    ” I hold a U.S. green card. How does this affect my tax residency?

    If you are a green card holder (that is, a lawful permanent resident of the U.S.), the U.S. considers you to be a U.S. resident.

    However, if you are a resident of Canada for tax purposes and do not hold U.S. citizenship, you should not identify yourself as a U.S. person to your Canadian financial institution.”
    http://www.cra-arc.gc.ca/tx/nnrsdnts/nhncdrprtng/ndvdls-eng.html

21. I have no idea about this part, all I know is that banks are going to be asking new customers to disclose if they are US citizens or are greencard holders, and thus made to sign the W9 or whatever other agreement the bank has…

22. @GeorgeIII

    Maybe you should write to your MP for clarification. It’s not like the Canadian government has never been wrong!

    @Eric

    Is this getting more weird or just more real?

    @nofatcataiwan

    Thanks for more insight into Taiwan, and welcome to Brock.

23. bubblestin why clarify it is explicit. It is like various letter people got from Canadian government they will not collect for IRS for Canadian citizen. I still hate 1995 USA Canada tax treaty. No plan ever to cross border.
    Is this like you doing your tax routine. How much dd it cost you? Based on that why would, I follow your advice.

24. nofatcataiwan
    See if your government has a web page similar to the one I previously posted. see if they have a get out of jail free card for Green Card holder who reside in Taiwan. You could be safe in Taiwan but do not go to USA.

25. Suit yourself, GeorgeIII.