The move will enable Beijing to obtain information on mainland Chinese taxpayers in the US, which will help in its fight against tax evasion and corruption.
“It is important, as China was seen as the last major outlier in reaching an IGA with the US,” said Charles Kinsley, a China tax partner at accounting firm KPMG. “Most major economies have negotiated an IGA, either formally or in principle.”
Eric Boes, an international tax consultant at the trust company Amicorp, said: “I can imagine Beijing will want information on Chinese taxpayers abroad. A possible reason is that the government wants information on corrupt Chinese officials.”
Really? Do the Chinese actually believe that the US, the world’s greatest tax haven, is going to hand-over any more banking information about their nationals than they have to the Russians, any number of Central or South American countries or, for that matter, any of the signatories to FATCA worldwide, including Canada? While the US may have gleefully yanked Switzerland’s banking secrecy culture out by its roots it sure isn’t about to do the same thing to Delaware or Nevada or Texas or Florida. It is simply laughable to pretend otherwise.
Yet plenty of pretending has been going on worldwide. We know that reciprocity is a lie, yet every single article and press release trumpeting yet another FATCA deal includes this easily-refuted canard. Is there something else going on behind the scenes that we simply haven’t figured-out? With only four sleeps left until FATCA ignites, are we truly witnessing the birth of a nightmarish One World Government ruled by a despotic America or is this more like a game of high-stakes poker where every player is badly bluffing – except maybe China?
From what I read, China is expecting reciprocity. And the USA better…..or else. This is probably good news, as the cap-in hand beggar that is the US had better play along or get whacked.
Well, I see the 3 quoted sources of what this means, are 3 FCC, or FATCA Compliance Complex institutions with a lot of vested self interest in this compliance. Still nothing said from either government…
Bottomline, to me it was obvious that avoiding FATCA sanctions starting in 4 days, it was important that even if they had read just thought they had read FATCA in their tea leaves, (like Norwegians pissing FATCA in the snow) that they would be deemed compliant by Treasury for another 6 months to escape the dire consequences of withholding and the impacts it could have on Treasury rates.
This addition to ‘sort of’ IGA in progress group is too convenient not to be VERY VERY SKEPTICAL .
It’s more like the US is afraid of upsetting their biggest creditor. Nothing more nothing less.
This is FATCA fallacy.
The USG is just buying time with the hopes the Chinese will agree.
I will be very interested in Eric’s comments … @Eric…. Are you awake over there? It is morning, isn’t it? 8:17am, I figure.
Most of the FairTax group simply wants them to go away and leave us alone. Our Marxist Government wants to control every aspect of every person in the world, starting with its own citizens. That is why they rely so heavily on Saul Alinsky’s book ”Rules for Radicals” where he advocates getting control of everyone by making everyone equally poor. Over spending, unemployment, too much debt beyond any ability to pay back, without confiscation of wealth from its citizens worldwide. Over regulation, making it impossible to comply with and then jail for violation even though the congress never passed any law to support the regulations is another hammer to hit us with.
There are very sensible people in the U.S. publically advocating revolution, disavowment of debt, going back to the gold standard, putting current leaders on trial and imprisonment for treason and every other thing you can think of.
We got free from England by first having an active press with distribution of printed subversive material and this spurred the early Americans to action. (Note–Alinsky was the first well known community organizer who went to Russia many times and was associated with the Socialist movement arm of the Democrat Party).
If this is true the battle against FATCA at the country level has been lost. No country, in the end, pushed back against this obscene law and the US got its way. Russia has also caved. China held the cards to just say ‘no’ and it did not do that. It’s now a matter of lobbying to change the law and law suits in some countries I suspect.
It’s starting to feel more unsafe than it ever has being a US citizen in the world – thanks to the US government.
Same reporter, but another article today…
Financial firms struggling with Fatca compliance as deadline looms
The first deadline for the US Internal Revenue Service’s new Foreign Account Tax Compliance Act falls on July 1, but will financial institutions in Asia be ready?
This goes to show you that the Fatca BLUFF is working as the US masterminds thought it would. they must be sitting back saying “my god, they bought it” I cannot believe some of the things I’ve seen in the past year. My own government has shown it needs to be overthrown before they totally destroy my country, I’ve seen the US government turn into a group of scoundrels who want to destroy the lives of ANYONE born in the US who left. I’ve been ignored by my own government as NONE of my letters, even 1 in person, have not been answered. i wish this was 100 years ago when traitors would be hung in public. Then I could tell my 5 year old daughter why those people were hung and how she will always have the protection from enemies by the government of the country she pays taxes and is a citizen of. slowly, she asks me questions about life. Should I lie to her? Should I tell her to stand out in the hall at school when our National anthem is being sang by her classmates? I cannot fail my daughter, this country was created by people who were not afraid to stand up and DO SOMETHING. Look out Harper, we are not standing by much longer. It is time to wake up Canadians.
With “mainland Chinese taxpayers”, that means that FATCA will only provide US banking information on individuals who live in China, right?
This article writes:
“Chinese authorities will similarly be able to obtain information on Chinese taxpayers based in the U.S.”
http://www.china-briefing.com/news/2014/06/30/china-agrees-fatca-compliance.html#sthash.9RypLxrX.dpuf
What is meant with “Chinese taxpayers based in the U.S”? Does this mean that US banks will export the financial data of US residents to the Chinese government?
@Just Me: sorry for my delay, things are a bit nuts over here for non-FATCA-related reasons. I will reserve judgment until I see the actual text of the agreement. Will be mildly amusing to see whether they choose to treat it as an actual treaty (i.e. laid before the Standing Committee) or just executive-order it into being as the Americans do.
Local HK media have been useless. Of course I’m unsurprised that Patrick Temple-West’s Brother From a Singaporean Mother over at SCMP doesn’t know how to do anything but quote the salivating Compliance Complex. But even the local papers which did a better job in the past have nothing interesting to say this time. I’m most surprised that HK Economic Journal said nothing in Chinese yet, just gave a summary of Southern Metropolitan’s report in their online-only English service.)
Chinese-language reporting from outside of HK is heavily emphasising the reciprocity angle. Can’t tell whether that means the media is dumb enough to believe the U.S. promises, or they think that Beijing is smart enough to have some way of backing up the reciprocity demands. E.g. Southern Metropolitan Daily: U.S. will provide information on Chinese citizens’ accounts in US. This is the report that got summarised by HKEJ. No clarity on whether it includes Chinese citizens actually residing in the US.
Didn’t see anything from PRC official media (Xinhua, People’s Daily, etc.), but Ta Kung Pao (Communist Party-funded HK newspaper) did run two reports: U.S. agrees to hand over Chinese citizens’ account information, and today U.S. overseas tax investigations ‘benefit’ China anti-corruption
United Daily News (Taiwan pro-KMT paper): Rich people ‘prepared already’, not scared. Fun quote from a Shenzhen-based green card holder: “In the end, China is China. If you’re the U.S. government and you want to check Chinese assets, do you really think it’s going to be that easy to do? Maybe they can do it for those Americans working in China, but we already know that the U.S. isn’t a paradise, and we’re prepared already.”
And, just for kicks and giggles, Falun Gong says U.S. bank accounts will be made public; Jiang Zemin’s stash has nowhere to hide and Xi Jinping joins hands with U.S.; ‘China’s #1 Corrupt’ Family Hit Hard
@Eric…
Thanks…
And the war begins, July 1st, 2014. So, now we see who gets damaged the most.
@Eric
Just to add fuel to the fire, a new article from NTD.tv
http://www.ntd.tv/en/programs/news-politics/china-forbidden-news/20140630/166203-will-the-fatca-help-china-fight-corruption.html
I’d sure like to know why the US, the world’s biggest tax haven, would want to kill the Goose that laid the Golden Egg by revealing the name of even one corrupt Chinese official to the Chinese government. Besides, wouldn’t that be like revealing the name of Don Corleone to a roomful of Mafia bosses – somewhat redundant?
Wall Street Journal weighs in..
Rich Chinese in Reach of New U.S. Tax Law
China Signs Agreement With U.S. on Taxpayer Information
Pingback: The Isaac Brock Society | IRS releases updated FFI list — poor countries falling behind
Concerns from Corporate Treasuries on what FATCA means…
China signals the inevitability of FATCA
As China signs onto an intergovernmental agreement to comply with US FATCA regulations, questions remain about formats and deadlines, but its reach is inescapable.
Haven’t read this yet, but just posting for FYI;
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2471108
‘Exchange of Tax Information and the Impact of FATCA for China’
Qiguang Hardy Zhu
Baker & McKenzie
March 1, 2014
” Abstract:
Without an express consent and authorization from the customer in relation to a FATCA disclosure, Chinese Foreign Financial Institutions’ (“FFIs”) compliance with FATCA would be in conflict with relevant domestic laws. However, under Chinese laws, Chinese authorities have broad powers to obtain tax information from taxpayers, withholding agents and third parties including banks. There is an adequate institutional framework and adequate mechanisms in place for Chinese tax authorities to effectively carry out an exchange of tax information. Also, China signed the Multilateral Convention on Mutual Administrative Assistance in Tax Matters on August 27, 2013, which expands China’s capacity to exchange tax information exchange.
According to the Release of Joint Outcomes of the Economic Track under the U.S.-China Strategic and Economic Dialogue V, the Chinese government and the U.S. government agree that each government will exert its best effort to enter into an intergovernmental agreement (“IGA”) to implement FATCA before a deadline of January 2014 (as of November 2013, no such IGA had been concluded). The IGA between China and the U.S. would relieve Chinese FFIs of the conflicted obligations imposed by domestic laws and FATCA. However, it is not clear when China and the U.S. will sign the IGA.
This chapter will give an overview of Chinese tax authorities’ powers to obtain information and the basis for international information exchange. The domestic regulations on exchange of information and domestic impediments to FATCA compliance will also be discussed”