Dr. Karen Alpert of the University of Queensland will be presenting this paper at a conference of Melbourne next week:
Investing with One Hand Tied Behind Your Back – an Australian Perspective on United States Tax Rules for Non-Resident Citizens
The paper is based on her posts on investment constraints at the Fix The Tax Treaty Blog, but much more technical (I still found it very readable and useful as a layperson). It deals with both issues specific to Australia, such as superannuation, and issues affecting all US persons residing outside the US regardless of country. Karen is the founder of Australia’s FixTheTaxTreaty and a frequent commenter here at Brock.
Bravo, Karen! Thank you. And thank you Pacifica for posting.
Dr. Karen…..thanks so much for this as its a valuable academic piece. It applies worldwide not just OZ and I am sending it to my MP.
Thanks for posting this, Pacifica. And thanks, all, for the encouraging comments. After the conference I will be revising the paper for publication – I’d love to hear any feedback that will assist in that revision.
“Australian citizens and permanent residents who are required to file US tax returns will find it more difficult to effectively save for retirement than their peers, and will be more likely to rely on the Australian government’s social safety net in their later years.”
Yup. the USA ruins retirement plans and then the citizens and residents of those nations have to go cap in hand for social handouts to their own governments and fellow residents. Seriously, this makes my blood boil.
I presented the paper on Thursday. The presentation went well. It generated a lot of discussion and I received some useful feedback on how to position the paper for publication.
That’s great news Karen, we’ll done.
Excellent! Looking forward to seeing it appear in print and (let’s hope) reach a wide audience.
Very nice. This is a world leading initiative. While many USP overseas individuals and groups are targeting FATCA/FATCA IGA, this is refreshing that in Australia with Karen, FTTT, & Board of FTTT, the key target is the tax treaty,( which is Australian law), and flaws in the AU-US tax treaty; the flaws of which and remedy for these flaws “in preventing double taxation” have been long neglected by the Australian Government.
FTTT also targets the FATCA IGA.
[Note the tax treaty is referred to as the Australian-U.S. tax treaty and that Australia is put first before the U.S., as it should be by people who live in other countries when referring to their tax treaty.]
Australia is contradicting its own public policy of Residence Based Taxation when it has agreed to make Australian law, via the tax treaty, U.S. treatment of Australian tax residents as also residents of the U.S. for U.S. tax purposes.
As part of paying taxes as a tax resident of Australia, is the obligation in return of the Australian government to protect its residents from external threats. When one lives in Australia (especially for a number of years/decades/ and who are Australian citizens), if they have a concern how federal government policy is impacting them, it is right for them to contact their Australian federal government representatives in the first instance, including a request for a meeting, as their Australian representatives are their local and closest representatives. These representatives may be much more attentive to concerns than representatives in a far off country(U.S.) Maybe Karen or someone else may express this better.
“While many USP overseas individuals and groups are targeting FATCA/FATCA IGA, this is refreshing that in Australia with Karen, FTTT, & Board of FTTT, the key target is the tax treaty…”
The IGAs rely on the information-exchange articles of the double-taxation treaties, so that’s not two different targets, it’s two different ways of addressing problems created by the international approach to the prevention of double-taxation / “double-non-taxation.”
The more the better. Success in any country would have implications for all.
I should probably say, “The Model 1 IGAs rely on the information-exchange articles of the double-taxation treaties.”
Model 2 IGAs don’t. Model 1 protects FIs from FATCA by invoking treaty provisions; Model 2 does not. So, USCs in Model 2 countries might not be helped by changes addressing the treaty problems.
The upside (for USCs in Model 2 jurisdictions) is that depending on local laws, they might have options which simply aren’t available in Model 1 countries – such as suing the bank for breach of privacy.
Congratulations @Karen, and thank you very much.
Any initiatives of this kind in one country represents gains for us all; your work can be cited by others in support of our attempts to hold our own local government to account in their capitulation to a foreign power – the US.
The Canadian government continues to be willfully guilty of egregious sins of omission in allowing our tax treaty with the US and the IGA to continue unchanged in disadvantaging local citizens and residents, and to continue to ignore the unrelieved burden of US extraterritorial punitive/double tax and penalty regimes which subvert and diminish our own local legal social and fiscal initiatives and values. Our government continues willfully to do nothing to renegotiate the treaty to address the many gaping tax treaty gap holes that do not recognize or exempt even our own local government blessed and tax advantaged registered plans that help ordinary people to save where they live and work – for education, retirement, disability, home ownership, etc. via our TFSAs, RESPs, and RDSPs.