Last week the CEO of Republicans Overseas and a Canadian legal expert spoke to me about tax cuts and post-Brexit opportunities with the US.
Give it a watch here: https://t.co/zk5fi2CJkt
— Steven Edginton (@StevenEdginton) September 25, 2018
Last week the CEO of Republicans Overseas and a Canadian legal expert spoke to me about tax cuts and post-Brexit opportunities with the US.
Give it a watch here: https://t.co/zk5fi2CJkt
— Steven Edginton (@StevenEdginton) September 25, 2018
I have only watched about a minute but I don’t think I agree with the premise that somehow Brexit helps eliminate CBT. Generally if you look at the EU Parliament vote back in July those in favor of Brexit were also in favor of FATCA.
I will also add I am basically neutral in the whole Brexit thing. i.e. I am not a supporter of those in UK who want to reverse the vote however, I also believe connected to FATCA/CBT that the remaining EU should take a very hard line if not perhaps “no deal” towards the large US banks who operate throughout Europe going through London.
“Generally if you look at the EU Parliament vote back in July those in favor of Brexit were also in favor of FATCA.”
Everyone who isn’t affected by FATCA supports FATCA. Not only does it catch money launderers and terrorists, it even punishes traitors.
TTFI is a poor alternative to RBT, it will not change the attitude of banks to US persons, if FATCA remains in place with its threat of a 30% withold banks will regard US person’s as toxic.
The US does not want to remove FATCA as they would be forced to join CRS thus exposing Delaware etc.
It is as I had feared. Yue is of course America centric, supporting Brexit equates to drawing the UK even closer to the US, the MO of the Brexiteers is to produce a low corporate tax, low regulation UK. As Charles de Gaule said “America doesn’t have friends, it has interests”, the UK are better off within the strength of the EU.
The proposed legislation which dare not speak its name could conceivably morph into a bill which would allow registered US citizens to sign a W-9 and hand over their SSN to a bank in return for being allowed to open an account.
Unfortunately that wouldn’t help with the pay-for, so it’s probably not going to happen. Certainly not imminently.
IMO
Limiting the registration scheme to non-filing non-US-resident USCs with no US income is the key.
It’s practically the definition of a US-born individual that doesn’t have a CLN but can’t make use of the leaky US tax code to commit tax evasion and money laundering.
A CLN would be better but registration would surely help at least some of those who can’t afford to renounce (provided the US can bring itself to stop trying to tax the non-US income of the registered USCs).
@plaxy
But can anyone see the banks wanting to take the trouble to discern those US citizens who have chosen TTFI and who would qualify by bring bonafide local residents? The damage is done, a CLN is the only get out of jail card. IMO.
“can anyone see the banks wanting to take the trouble to discern those US citizens who have chosen TTFI and who would qualify by bring bonafide local residents?”
Good point – I should have made it clear that my comments refer to IGA1 jurisdictions, where the banks only need to get the W-9 and SSN. It would be different in an IGA2 jurisdiction presumably.
What do IGA2 banks require, in order to consider letting a US-born individual open an account? Proof of FBARs, or proof of filed 1040?
Some no doubt won’t touch the US-born with a barge pole. But presumably some do? What protection do they ask for?
The legislation under discussion would do nothing to solve the FBAR problem or the signatory problem – not in any jurisdiction,
TTI is a very poor alternative to RBS. Have a look at the document here: http://republicansoverseas.com/wp-content/uploads/Territorial-Tax-Reform-Proposal-Jan-6-2017.pdf
Imagine you live overseas and never step foot in the US. For example, you are an accidental american. Here are some items you still have to pay tax on even on TTFI:
1) Any ownership of any US listed stocks. Even if the company is based in your own country, but listed on the US stock exchange. So, no investing in Apple for you or any other US based company
2) Any interest from money in US bank accounts. Unlike your non-US citizen non-resident, you cannot have a bank account without paying taxes on the interest
3) Any revenue from the US. So, you are a freelance graphic designers and your customer happens to be in the US. You now owe US taxes on that income.
TTI does not reduce any of the complexity of taxes for expats. And, in most cases, it does not reduce any of the taxes. The only people it reduces taxes for are rich americans who will continue to live in the US and will equally benefit from TTFI.
TTFI is nothing more than using expats as a sympathetic group to get tax breaks for homelanders For most expats it will do nothing good. Especially considering many expats already live in higher tax jurisdictions. It does not solve all the complexity of how to invest money especially when you have to avoid all US listed stocks or else keep track which ones are Us based and which are not, etc.
This is another nightmare for expats being sold as a solution.
@Randall
The January 6, 2017 document that you are referencing at RepublicansOverseas.com is NOT the current TTFI proposal. The current proposal is coming from Congressman George Holding.
So, without taking any position on the Holding Bill, the January 6, 2017 document cannot be used as the basis for accepting or rejecting the current proposal.
@USCitizenAbroad If it was anything other than what I said it would be called “Residency-Based-Taxation”. The things I outlined is what differentiates a territorial system from a residency based system.
So, unless George Holding introduces RBT under the guise of TTFI then this is the net-result.
I have been repeating this many times, this TTFI is a rubbish proposal. I do not understand the reason of supporting this as it won’t even resolve a single problem that we massively dealing with.
I can hear someone is going to say, hey this is not a prefect solution and stop shouting like a homelander! You have not done anything yet!
Well, I have been emailing different Rep in Congress, you don’t see this doesn’t mean I am laid back with my Whiskey.
And I have never asked anyone to donate
If you (generic you) are an American living in a high-tax treaty country and want to have US dividends / interest, and/or work for an American employer, you can use the present system, which lets you file in both countries to claim available credits and exemptions. Clearly, there’s nothing “accidental” about investing in America or working for an American employer.
A well-designed registration system might help restore banking access for US citizens who can’t renounce.
Not likely to happen, though, or even get designed. It would be a lot of trouble for American politicians to go to, for zero reward in votes, donations, or influence.
Renounce, ignore, or comply.
I heard this TTFI proposal as supposed to be voted on by the end of September. Does anyone know if it was voted on yet?
No such bill has been introduced in the House or voted on.
@plaxy
Well then when do they plan on introducing this bill?
“Well then when do they plan on introducing this bill?”
As far as I’m aware, no statement has been made by Rep. Holding about whether he is currently planning to introduce a bill allowing some non-US-resident USCs not to file US tax returns.
If he does plan to introduce a bill, presumably it could happen after the elections, or during 2019.
Eight years later, the program is still getting off the ground. Countries around the world have signed agreements, and more than 100,000 foreign banks have sent information to the United States. But “there is no ongoing compliance impact of the FATCA at this time,” according to a report this year by the inspector general for the IRS.
The report found serious problems with the millions of records collected so far. About half of the records, for example, didn’t include identification numbers for the taxpayers, making it difficult to match the accounts with specific individuals. The IRS hadn’t set up a process for using the records. The agency said it was working on such a system.
Here, too, the cuts to the IRS’s budget have had an impact. During the Obama administration, the IRS asked Congress for hundreds of millions of dollars to carry out the program, but received nothing. Since Trump took office, the revenue service has stopped asking.
https://www.rawstory.com/2018/10/budget-cuts-irs-work-tax-cheats-facing-collapse/?bt_alias=eyJ1c2VySWQiOiAiMTY2NDljM2QtMzQ2MC00MmM2LWJkZjgtNDM1OTk3YjNmODBkIn0%3D
“About half of the records, for example, didn’t include identification numbers for the taxpayers”
No kidding, with the Social Security Administration in charge of neither granting nor rejecting applications for social security numbers and the IRS in charge of rejecting applications for Individual Taxpayer Identification Numbers.
Seeing the phrase “tax-cheats” in the URL of the news article, I won’t waste time looking to see if the article talks about honest people.
ND:
“the Social Security Administration in charge of neither granting nor rejecting applications for social security numbers and the IRS in charge of rejecting applications for Individual Taxpayer Identification Numbers.”
That’s not why most reports don’t have SSNs though – more likely it’s because plenty of accountholders don’t respond to a FATCA letter by helpfully trotting down to the bank and handing over their SSN.
It’s voluntary. It can’t be coerced, just like complying with their insane taxing of non-existent income of non-residents can’t be coerced.
The whole business is just one colossal cock-up.
Aaron:
“when do they plan on introducing this bill?”
Grover Norquist has tweeted (https://mobile.twitter.com/GroverNorquist/status/1046609219254988802):
“We can do much inside reconcilliation package (like last dec).
We need 51 Senate votes and 218 House. And a president.”
So much for bipartisanship.
“We can do much inside reconcilliation package (like last dec).”
Seeing what they did last Dec., we know the shafting is bipartisan. Of course we knew that already, but we didn’t know how much worse it was going to get.
“we know the shafting is bipartisan. ”
Yep. The country is doomed. Government of the people, by one party, for one party, for two years or four years or until impeachment; then comes the Group Hate and the other party takes over.
Even the 2.0 tax measure around SALT may disproportionately impact USP overseas as it explicitly excludes deduction for “foreign” taxes. I have not heard any one else talk about this and I don’t have an idea of exactly who would get hit or how they would. I have not heard of any USP overseas using such deduction previously.
The foreign tax credit (Form 1116) already credits state and local taxes the same as national taxes. If you have enough income to benefit from either the credit or the kind of deduction that used to be available, normally the credit is better.