Further to Patricia Moon’s comment here yesterday about having been contacted by Stephanie Soong Johnston of TaxAnalysts regarding the European Union’s resolution to open negotiations on FATCA with the US, Ms. Johnston’s article appeared today: EU Lawmakers Vote to Kick Start FATCA Talks With United States. It contains several quotes and observations by John Richardson along with mention of the Isaac Brock Society and ADCS.
” . . . . John Richardson, a lawyer speaking on behalf of advocacy groups the Isaac Brock Society and the Alliance for the Defence of Canadian Sovereignty, noted that only a few countries confer citizenship based only on birth in their countries and that only two countries impose worldwide taxation based only on citizenship: the United States and Eritrea. The United States, however, is the only country to do both, according to Richardson.
Richardson welcomed the EU resolution because it recognizes that the United States is imposing worldwide taxation on people who are tax residents of Europe and have no connection with the United States, adding that the combination of FATCA and U.S. citizenship-based taxation has rendered the citizens and residents of other countries as second-class citizens in their home countries.
“’On a broader level, the EU resolution will be welcomed by Canada and other countries who are suffering the effects of U.S. extraterritorial laws — FATCA and citizenship-based taxation,’ Richardson said. ‘All countries should support the EU resolution and all countries should work together to ensure that U.S. tax laws cannot extend to the tax residents of other countries.’”
(1) The article’s behind a paywall.
(2) “The EU” didn’t do anything, just the European Parliament. You can’t even call them “EU lawmakers,” it’s a talking shop. There’s no reason to suppose this will lead to “FATCA talks” with the USA, any more than their resolutions on behalf of Tibet will lead to talks with the Dalai Lama.
(3) The focus is not on CBT, but on “Accidental Americans,” who are rather narrowly defined (for example, we now hear that they must have never been issued Social Security numbers). Furthermore, any relief (such as streamlined renunciations) would only apply to European citizens, or perhaps residents–and likely only to those born dual. It is even more likely that no relief will be offered at all.
@Zla’od
1) sorry, there is nothing we can do about that. I will presume you have been unable to read it.
2) There’s no reason to suppose this will not lead to FATCA talks -there are other things in the wind that might just make it possible. The U.S. has created extra negative feeling with the tariffs; not wanting to deal with NAFTA; people ARE trying various routes such as Republicans Overseas, Grover Norquist, Jim Jatras. There’s also the Canadian lawsuit.
3) Why do you expect to see something about CBT when the focus is FATCA? And of course it focuses on Accidentals because those are the people who have been lobbying for this…….. I don’t understand how you imagine that the U.S would accept “streamlined renunciations” (or whatever) only for those in Europe. That doesn’t make any sense.
It may well be that nothing happens. But sometimes it’s worth having some hope. After all, that’s what Brock was/is for….
Each step along the way is important.
I worry about the wording of this announcement. One way to read this is to read it as an effort to Make The European Tax Authorities Great Again, by negotiating a “reciprocal FATCA”.
Cecilia is girl-buddies wiith Sophie, but Cecilia is very central to the globalist (OECD etc) agenda.
Cecilia’s party is pro FATCA , see
http://isaacbrocksociety.ca/2013/02/13/correspondence-between-swedish-citizen-and-political-secretary-of-the-controlling-party-in-sweden/
Sweden already has problems with its citizens moving overseas—they get their Swedish accounts closed after 6 months, but Sweden doesn’t care about its expats either.
What might be a benefit is for the EU to begin negotiations and open the can of worms for Trump to see what a lousy globalist thing this FATCA monster is and throw the whole thing in the dust bin.
The accidental Americans have the largest media support (this was confirmed to me by a european journalist). The most likely routes of success are to get consideration for self-renunciation by the EU. This angle could be pushed hard by those who need it and want it.
Holding my breath.
Zla’od – “any relief (such as streamlined renunciations) would only apply to European citizens, or perhaps residents–and likely only to those born dual. ”
Fortunately, in IGA 1 jurisdictions, USCs don’t need any “streamlining” to renounce (at present). They do need $2350. If that sum can be scraped together, a CLN can be bought, and shown to banks to prove non-USness.
(This may not be the case, in IGA 2 jurisdictions.)
Patricia Moon – “There’s no reason to suppose this will not lead to FATCA talks -there are other things in the wind that might just make it possible. ”
I agree. The EC responses on this issue changed tone following the US Tax Deform Act. Unfortunately, only the Council can take action. And of course the US might not agree to renegotiate. And even if they did agree, what could they actually do? It’s not like the country’s got a functioning government. The IGAs have never even been approved by Congress, so renegotiating would be tricky to say the least. And it’s all too likely there would be a trade-off, which could be quite unpleasant for individuals.
My suggestion to US-born AAs in Europe would be, renounce now while it’s easy (if renunciation is your chosen option and you can raise the cash).
Well done Tricia and John Richardson! John’s comments at the end of the article are spot on.
As for the impact of the resolution – it’s existence and the margin by which it passed are important, even though the resolution appears to be essentially advisory. I’m so tired of hearing other governments say that fixing FATCA/CBT is a matter for the US. It’s very refreshing to hear Sophie in ‘t Veld say that the EU and member states should be protecting their own citizens.
Yes, the resolution calls for reciprocity rather than FATCA repeal. But from the various debates over the past few months and the report submitted in May, my understanding is that they want to exempt EU citizens and residents from reporting by EU banks, and they want to receive information about EU residents banking in the US that is equivalent to the information being sent about US residents banking in the EU. It’s still using a sledgehammer to crack a walnut, but it’s equivalent to what is happening under CRS. Politically, I don’t think it’s possible to roll back AEOI any more than this, at least until there’s more empirical evidence about the costs/benefits.
“my understanding is that they want to exempt EU citizens and residents from reporting by EU banks, ”
I haven’t seen that suggested? Did I miss it?
During the debate a couple of days ago, the European Commission’s representatives compared FATCA with the OECD’s CRS, which was absolutely disingenuous of them. Why exactly are we focussing on FATCA? They have been playing stupid with us long enough.
In addition, MEP Sophie in ‘t Veld rightfully brought up a good point when she deflected the Commission’s position that they had neither a mandate nor were competent regarding FATCA whilst 14.000 mostly redacted documents (forcibly disclosed upon her request) showed their otherwise deep involvment. The European Commission can never be trusted anymore. Never ever.
My frustration with the entire matter is the emphasis on ‘accidental Americans’ when it should be on European citizens with US personhood. Whether US-born European citizens have been living in the EU since infancy, adolescence or adulthood is besides the point; they are European citizens in the EU, full stop. An organisation with the largest collective market in the world could have done (and can still do) so much more to put the Yankees in their places.
To comment on other people’s comments, something will eventually have to happen in terms of remedying the effects of FATCA. There is simply too much anxiety, anger, frustration and confusion over this matter. If nothing gets done, reactions will never abate…
“something will eventually have to happen in terms of remedying the effects of FATCA. ”
ECJ ruling, best chance IMO.
@plaxy
“ECJ ruling, best chance IMO.”
All actions lead to their logical conclusion.
Sorry, Duality, I don’t understand what you mean.
@plaxy
In reference to a CLN not being enough to satisfy banks or meet criteria to renounce in IGA 2 countries – how so?
I’m in a Model 2 country and so far my CLN alone has always been sufficient for banking purposes and I didn’t have to prove any tax compliance in order to relinquish.
Would you please explain what you meant by your comment because I don’t understand it?
“I’m in a Model 2 country and so far my CLN alone has always been sufficient for banking purposes and I didn’t have to prove any tax compliance in order to relinquish.”
Good. Is that the case in every IGA 2 country regardless of FI?
@plaxy
“Is that the case in every IGA 2 country regardless of FI?”
I can’t answer that. My experience is only in my country, Austria. Banking is no problem and getting supplemental retirement plans e.g. from private insurers is also possible.
However, I was wondering if you knew what specific language is in the Model 2 that supposes a CLN is not all that could be required as proof. What is different from Model 1 IGAs?
My perception is that US government government will never distinguish an “accidental” American from any other kind of American, so should there be any relief given to Americans abroad, it will be for all Americans abroad.
I’d like to hear some of the reasons why those members voted against the resolution.
The Model 1 protects FIs from the 30% withholding, provided they get the self-certification, copy of non-US passport, and copy of CLN. So FIs don’t seek proof of compliance. I’ve read that some IGA 2 residents have been asked for proof of compliance. I don’t know how frequently that happens,
@plaxy
I see.
I have only heard of proof of compliance (copies of FBAR and 1040) being asked for in Switzerland.
@BB
“My perception is that US government government will never distinguish an “accidental” American from any other kind of American, so should there be any relief given to Americans abroad, it will be for all Americans abroad.”
Precisely. This was the point I was trying to make earlier today. An exemption from FATCA should be enforced across all affected European citizens, not just ‘accidentals’ …
If there was going to be any exemption.
Considering that the Member States could very easily apply the $50,000, but don’t;
and considering that the EU DAC/CRS could have a threshold, but doesn’t;
and considering that America could very easily allow an exemption for same country accounts, but doesn’t;
the prospects of any USC getting exemption seem slim.
Nevertheless, the AAs have accomplished an excellent thing for all of us, in bringing about the report and the resolution. They deserve credit, and thanks, IMO.
“EU Parliament Calls For Renegotiating ‘Shocking’ FATCA”
https://www.law360.com/tax-authority/articles/1060178/eu-parliament-calls-for-renegotiating-shocking-fatca
“MEP Sophie in ‘t Veld rightfully brought up a good point when she deflected the Commission’s position that they had neither a mandate nor were competent regarding FATCA whilst 14.000 mostly redacted documents (forcibly disclosed upon her request) showed their otherwise deep involvment. ”
Links to the disclosed documents:
https://sophieintveld.eu/commission-discloses-documents-on-us-tax-agreements-with-eu-member-states/
FATCA and the usa’s citizenship -based taxation (with North Korea and Eritrea–a small African dictatorship–how fitting), needs to be repealed.
However, it will not. Just lots of talk, blather, someday someday, empty promises, slight tweating polly BS etc…. the us was/is an imperialistic bully, and the EU’s countries all signed this FATCA swill–bent over, and played lap dog to the us. All Europeans (naturalised/or born) should NOT be discriminated b/c of the us empire’s overreach. usa—horrible empire of hu$lters, hucksters, and imperialistic war mongers.
The countries that signed up for this FATCA “agreement” were complicit; they simply don’t really care about duals, or accidentals, etc….they would want them to renounce their us ownership (tax slavery), go away, or battle it out with the do nothing farcical us govt.
The EU and others don’t want to incur the 30% us wrath extortion penalty. The EU and others don’t really give a rip abt their citizens–just lap dog to the us empire.
Jon A – Yes, the IGA signatories were complicit. Most were quite happy to sign – not only because their financial services industry was keen to avoid the 30% penalty, but also because they wanted to introduce CRS – and this was much easier once banks were already collecting FATCA information. No other country really thought through the consequences of reporting their own citizens and residents to the IRS. They kept saying that FATCA imposed no new taxes, but did not realise that the unenforced US taxes would actually pull money OUT of their own economies.
Karen – Are you suggesting that the EC nudged the UK into reversing its initial opposition to FATCA and joining with the other G5 countries to negotiate the IGA?
Or have I misunderstood?