Fabien Leharge spoke very well on France’s TV5 about the injustices of the implementation of the American FATCA law in France, and how it discriminates in particular against French citizens who happen to have been born in the USA but who didn’t stay their long enough really to consider themselves Americans. But now their own country of France is treating them as foreigners.
Featured in this segment is the story of Diego Cesari who was about to buy a house in France. But because of his USA birthplace, no bank in France would lend him the money until he could prove that he had made it right with the IRS. A few months after his birth in California, his family left the USA definitively. His memory of the USA is based on a few photos and a birth certificate. Near the end of the interview he says, “I have no ties with USA. I mean listen to my accent–I would say that I have really assimilated a good French rather than an ‘American’.”
This is embarrassing for both the governments of France and the United States. When will these human rights abuses end?
“This is embarrassing for both the governments of France and the United States. When will these human rights abuses end?”
No it’s not. The know no shame.
Needs subtitles!
Thanks for this. Note that Fabien Lehagre says in the interview that he had already written to Emmanuel Macron when Macron was finance minister — no answer. Now Macron is president, and was recently very busy holding Trump’s hands — to busy to mention this subject I suppose.
Unfortunately Frédéric Lefebvre, a french MP outspoken against FATCA and the IGA, was not re-elected in the recent elections.
Nevertheless, getting the word out is helping and Europe (the EU) is taking notice, as was recently posted here. The US was smart in getting all the bilateral IGAs, ruling out the EU in itself. Perhaps an EU-wide “IGA” would have been better negotiated by the Commission. One thing the EU is good at is negotiating treaties, as the UK is finding out.
Clearly, in the meantime, I think we in the EU need to resist and threaten banks with discrimination lawsuits.
A 2014 complaint to the Belgian financial ombudsman (https://www.ombudsfin.be/en/individuals/home/) resulted in acceptance of discrimination (!!) (https://www.ombudsfin.be/nl/exclusion-des-clients-am%C3%A9ricains-%E2%80%93-fatca-%E2%80%93-principe-de-non-discrimination/ — in French).
Nevertheless, they cite the Centre for Equal Opportunity (Centre pour l’Egalité des chances, which in a letter dated Sept 9 2014 said that in refusing services to people targeted by FATCA, the bank was directly and indirectly discriminating on basis of citizenship, which is forbidden by the law dated May 10 2007). But things could go further, to the courts.
In my case, I have decided to ignore my Belgian bank’s requests for more information on my foreign tax liabilities. So far they have, following my absence of response, decided to send my account info to France (of which I am citizen, but not resident, and not taxable) thru CRS but not yet to the US (via the Belgian Government) — at least not that I know of. I await further action on their part, at which point I will just continue to state that I am an EU citizen legally residing in Belgium, end of story. Any attempt to discriminate because of my US birthplace will be duly noted and taken to court. Good thing I got all my loans before FATCA, though…
I am thrilled to see the Américains Accidentels raise hell, yet cannot consider myself an accidental. I do think that the term remains meaningful, and illustrative. Progress on the “Accidental” front will be progress for all.
The U.S Government is never embarrassed nor do they have any sense of right and wrong, they only know ”it is the law” and you must comply.
If you ever want to change anything you must hire a lobbyist (Our politicians love lobbyists) and give them a large chunk of money to buy a favorable decision on any bill and you’ll get what you want. That is, unless your opponent gives them a bigger check.
“This is embarrassing for both the governments of France and the United States.”
‘No it’s not. The know no shame.’
Something was lost in translation. He meant to say that both the governments of France and the United States are pregnant.
By the way Mr. T, you’ve been in Japan long enough to learn the difference between a guilt based society and a shame based society, right? Suppose a male manager rapes a female subordinate, and furthermore (this is a stretch but it happens sometimes) suppose she sues. In a guilt based society, the company would fire the rapist because he’s guilty. In a shame based society, the company would fire the victim because she embarrassed the company, damaging its reputation a tiny little bit.
Wait a minute.
“This is embarrassing for both the governments of France and the United States.”
This was written by Petros?! I wonder what he was thinking.
Has anybody considered starting an expressly anti-American political party? (In either country, Canada or France. Or anywhere else.) I mean, a party that calls for withdrawal from NATO, expulsion of diplomats…hell, outright war if you’re feeling energetic. The details wouldn’t matter as long as the party remained small, and you’d get a certain amount of media attention.
@Zla’od says
We could call it the Isaac Brock Party.
Becareful which issues you choose. Calling for the Withdrawal from NATO would have the following effects. The US homelanders would say ” Good riddence! That’s just one less deadbeat state we have to defend”. In France, regardless what the citizens there may feel or what the leadership may say, the gov. knows that the old economic rule of “guns OR butter” still applies. EU states have long gone the butter route knowing that the US provides the guns. Severing this would mean less to spend on butter and just take a look at those states which have been attempting to ruduce its population consumption of butter (social services) to get an idea of what the reality would be.
Any group advocating withdrawing from NATO would be labeled a kooky and one of what they advocate would be taken seriously.
“Any group advocating withdrawing from NATO would be labeled a kooky and one of what they advocate would be taken seriously.”
Should say,
Any grouo advocating wihdrawing from NATo would be labeled “kooky” and nothing of what they advocate would be taken seriously.
http://adst.org/2014/06/france-has-degaulle-to-withdraw-from-nato/
Re:
As the effects of: FATCA, U.S. taxation of the residents of other nations, the rise of “Tax Haven USA” and the unwillingness to join the OECD “Common Reporting Standard” become clear the political parties of ALL nations will become “Anti-American”. (For years the Canadian NDP Party was extremely anti-American.)
Consequences:
I suspect that countries will realize that they cannot allow the immigration of U.S. citizens and immigration from American will be banned or made prohibitively expensive.
This will be followed by a consideration of the “deportation” of those who are U.S. citizens ONLY.
Finally, all countries will have to decide what to do with “dual citizens”. Perhaps the solution would be to give them an ultimatum:
Renounce U.S. citizenship or be stripped of your primary (Canadian or other) citizenship.
As the interview with Fabienne makes clear, it is simply impossible to allow U.S. citizens to live in the country.
This will happen slowly but it will happen.
@ND
Yes, and there has been 51 years since then. That’s 51 years of not taking defence spending seriously while spending on the butter.
I haven’t looked but I would bet that France’s military was far stronger in 1966 than it is today.
@USC abroad.
I believe you are correct though I am not so sure it will be slow. I think various countries will be slow to realize just how dangerous USCs are to their economies but once they do I think their reaction will be shockingly swift.
FATCA turned all of us into unwilling Trojan Horses.
With countries now implementing their own versions of FATCA, I think that before too long it will be impossible, in practical terms, to live outside the country of one’s birth. Those born abroad will, of course, be the worst affected. Those like the subject of this thread being forced to “return” to the US, giving up their chosen lives because the can no longer live outside the land of their birth. Those like my children, born in Japan, unable to leave the land of their birth yet unable to have a bank account required to receive employment or even government assistance.
What a future we have created.
@Japan T Don’t under estimate the momentum of governments doing nothing.
From the Japan Times July 23, 2017. Sound familiar?
“Reader M wrote to Lifelines about Japan’s inheritance tax law, which he calls “one of the most punitive in the world”:
I’ve read with interest a number of articles in The Japan Times recently about the Japanese government’s efforts to make it easier for foreigners to obtain permanent residence in Japan. However, there’s another issue that the government has introduced recently that is actually a very big disincentive for foreigners who are considering moving to or taking permanent residence here, and that is the proposed changes to the inheritance tax law. I have a number of friends who are in the process of leaving as a result of this, and others who are refusing assignments here.
Yuko Urushimatsu is a bilingual taxation specialist who has helped answer inquiries on similar matters in past columns. She helped us get to grips with this tricky topic. According to Urushimatsu, the 2017 reform of the Japanese gift and inheritance tax system has various implications for foreign nationals living here.
The first thing is to consider the reforms in relation to visa status and length of residency in Japan, based on the following two categories. (More information on these categories can be found right at the end of the Immigration Control and Refugee Recognition Act here: bit.ly/jimmiglaw.)
1) Short-term residents/table 1 visa holders
“Those who have been in Japan for no more than 10 years within the past 15 years — so- called short-term residents — and who have a ‘table 1 visa’ (such as a working visa) are now regarded as nonresidents” for gift and inheritance tax purposes, Urushimatsu explains. “As a result, they are relieved of tax obligations for any overseas assets they receive from parents abroad. This ties in with the government’s efforts to attract more highly skilled foreign nationals.
“Irrespective of their current or future location, such individuals need not worry about taxation on any assets they receive outside Japan, as long as they hold a table 1 visa and have stayed in Japan short-term.” However, Urushimatsu adds, once your stay exceeds 10 years within the past 15, your tax obligations will change in line with 2) below.
2. Long-term residents/table 2 visa holders
Gift and inheritance taxation has become stricter for long-term residents. Basically, this covers those who hold a “table 2 visa” (such as spouse visa or permanent residence) and those who have lived in Japan for over 10 years within the past 15 (defined as “long-term”).
“Their tax obligation on worldwide assets is not limited just to their period of stay in Japan but also includes the next 10 years after they leave Japan,” Urushimatsu points out. “Thus, it might prove beneficial for table 2 visa holders who have lived in Japan short-term to consider switching to a table 1 visa if possible.”
The next step is to distinguish the roles of the two parties involved in the gift and inheritance tax equation, namely the recipient (the donee or heir) and the donor or decedent (deceased person). Unlike some other countries, Urushimatsu notes that only recipients have tax obligations in Japan. So how do things add up for Japan-based foreign nationals?
Foreign residents of Japan are likely to be most concerned with the implications of potential tax burdens placed on their heirs.
“In principle, transfer of domestic assets is always categorized as a taxable transaction. In addition, if your heirs are gifted or inherit your worldwide assets while you are living in Japan, they have tax obligation for those assets regardless of their country of residence,” says Urushimatsu.
The important thing to note is the change pertaining to cases where neither the recipient nor the donor/decedent is based in Japan.
“Previously, you had no tax obligation regarding your overseas assets in such a case. However, the new rule stipulates that if the donor/decedent had long-term residence in Japan within 10 years of the gift or inheritance being passed on, then not only domestic but also overseas assets might be subject to Japanese taxation. This is irrespective of both parties’ current residential status,” explains Urushimatsu. “For example, if you lived in Japan for more than 10 years and then pass away within five years from the date of your departure, your heirs have tax obligation for both domestic and overseas assets.”
Based on this change, it is conceivable that an heir who does not have Japanese nationality and has never even visited the country could wind up with tax obligations here. (However, they may claim the foreign tax credit on their residential tax return in cases of double taxation.) The accompanying chart summarizes this information, based on the Japanese original on the Finance Ministry’s website (at bit.ly/moftaxreform)
Urushimatsu shares some interesting background information behind the changes.
“The 2017 reform was implemented to plug a loophole that had been exploited by some wealthy Japanese nationals. In this tax evasion scheme, they left Japan and lived abroad for five years in an attempt to transfer their overseas assets with no tax burden on their heirs (who were born abroad or had given up Japanese nationality).”
Unfortunately, the new measures will now also have a potential financial impact on law-abiding foreign nationals, as well as their relatives.
In closing, Urushimatsu notes that the information is given here as a general guide only, and she recommends consulting with the local tax office or a taxation professional (zeirishi) for advice on specific situations.”
@JC
Vovernments need not do anything. When banks come to them asking what they should do, all the gov. need do is shrug. The banks then implement whatever they feel best to protect themselves, individually a/o collectively. We are already seeing what they deem best.
End result, those living in the country must leave as they can no longer participate in normal daily banking and finance. Those considering moving there are turned away by employers as they have no method to pay them.
In some cases of foreign spouses of domestic nationals, governments may have to act. But banks are already putting lots of pressure on such unions.
From PWC. Sorry, just the title, but it can be easily found.
“Update: Japan Gift & Inheritance Taxation Reforms affecting Expatriates on Assignment in Japan – Relief and More Exposure”
Additionally, just stopped by a local bank. US Social Security Number is required to open a bank account in Japan. Will take pics of the explanation they provided and the form later. getting ready to take my children to see fireworks.
I have scanned several docs. that I have had to fill out here in Japan. Let’s see if I can figure out how to post these. For my first attempt, this is the form I must now fill out when cashing an International Postal Money Order.
Well, it seems I have no way to cut and paste the jpeg nor the PDF of any of these docs. So I’ll type in some of the text. Below is from the form now required when cashing money as described above. I am also required to write what they payment is for and provide my My Number card for the post office to photo copy and show photo ID.
“Please ensure that the name, address and Social Security and Tax number entered is exactly as as shown in your official identification document, in Japanese or block letters, in accordance with “The law on reporting requirements on cross border payments and reeipts for the tax law compliance”
From the explanation sheet given me by Tsukuba Bank which is from the Japan Bankers Association, prepared June 2014.
“If any of the following applies to you, your account information is treated as “reportable” under FATCA”
“For individuals
– U.S. citizen (who holds U.S.nationality)(*2)
– Green Card holder (who holds U.S. permanent residency (immigrant visa)
– U.S. resident (*3)
(*2) : Note Please see back of this page if you were born in the U.S.
(*3) : Please see back of this page for requirements to be treated as a U.S. resident.”
From the back of the page.
“For Individuals Customers Born in the U.S.
If you were born in the U.S., you may have U.S. tax obligations regardless of your current country of residence, and we will need to as you to provide us with certain documentaion. Furthermore, if you currently hold U.S. nationality and intend to abondon it in the future, please inform us when you have actually abondoned your U.S. nationality, as we need to follow certain procedures to document your status”
Notice, the fact that the customer born in the U.S. might a Japanese citizen or a citizen of of a third country has no bearing on this.
“For Individuals Determination of a U.S. Resident.
In general, if you satisfy the conditions listed on the right” [ listed below here] “in connection with the duration of your physically presence in the U.S. you will be considered a U.S. resident for tax purpose.
-You stayed in the U.S. for 31 days or more during the current year, and
– The sum of the following is 183 days or more
– The number of days you were present during the current year, and
– 1/3 of the number of days you were present during the first preceding year, and
– 1/6 of the number of days you were present during the second preceding year.”
And Japanese companies are still sending their employees and universities their students to the U.S. for extended periods.
“Reporting to the U.S. Tax Authorities
If you are treated as a U.S. person, we are required to periodically report your information such as nane, address, account number, tax identification number, account balance, interest income, etc., the the U.S. tax authorities.”
“If you are unable to cooperate with the bank for purposes of the FATCA Due Diligence, you will not be able to open a new account at that bank.”
“Please note, however, that pursuant to the Income Tax Treaty between Japan and the U.S., your account information may be provided to U.S. tax authorities via Japanese tax authorities.”
–
The info sheet I quoted from above was folowed by the “Self-Certification for FATCA” from which requires name, address and U.S. TIN (SSN or ITIN) and signature, date and seal following this statement.
“Consent to report.
I hereby express my consent to the Bank that the Bank report information about myself (name, address, TIN, transaction records (account balance, change in amounts, etc) to the Internal RevenueService of the U.S. and to the Japanese Tax Agency for the p”
And that is how it ends, the last statement cut off after the first letter of a word.
Notice no reference to the $50,000 balance, nor even $10,000. ALL accounts helmby US persons are liable to be reported. Also note that transactions are being reported. What exactly, are the “etc.” the mention? To me it means “whatever the US wants”.
Wish I had a way to send PDFs of the actual docs for everyone to see for themselves.
So now, in addition to what the French gov. is doing to its citizens born in the US, we now have more info on what Japan is doing to its citizens who were bon there of spend too much time in the the US.
@Fred (B). Frédéric Lefebvre initially was of assistance but as time moved forward, he was not.
How so?
Just learned from my spouse that a coworker was summoned to the tax office offer unreported investment income. The investments are in the US. Seems that reporting from the US have begun, at least to Japan.
“Seems that reporting from the US have begun, at least to Japan.”
This isn’t enough information to figure out if the US is giving Japan more reports than it did before FATCA. For decades there have been occasional articles in the Japan Times about Japanese people gettinig caught with unreported investment income from the US.
Admittedly not a hot topic for me, but the few stories of this kind I remember are of famous, fantastically rich folks who stashed huge sums of cash in investments overseas. My spouse’s coworker is an ordinary kaishain. There is a recent Japanese law (2011?) that requires residents to report overseas assets over a certain value (¥500,000?) and the British friend I have told of before had his accounts in Great Britain and elsewhere closed as the FFIs now have to report to Japan and they do not want the extra work.
If Japan was catching ordinary kaishain’s ordinary investments overseas in the past, do you know what mechanism made it possible?