How cool is this? Dutch-Americans could be classified as ‘tax evaders’ IN THE NETHERLANDS!! https://t.co/zTCdzfxFaN pic.twitter.com/NwIdeLkwpq
— U.S. Citizen Abroad (@USCitizenAbroad) August 4, 2020
It’s hard to know whether the story referenced in the above tweet is true or not. But, assuming it’s true, this really would represent a milestone in the extra-territorial application of US law.
Think of this way …
So far, the United States of America – the great “citadel of freedom of justice” – has managed to:
1. Export FATCA to the rest of the world
2. Gotten the world to agree that, the United States, and the United States alone determines which of the residents of other countries are to be considered to be “US persons” for FATCA purposes.
3. Forced the non-US banks to pay for the witch hunt and general FATCA inquisition
4. Expand the US tax base into other countries (think of the OMG moment – am I really US taxpayer property?)
5. By expanding the US tax base into other countries manage to extract capital from other countries (think Exit Tax, Transition Tax, GILTI, etc.)
6. Solidify the status of the the United States of America as the world’s number one tax haven (remember since the USA hasn’t signed on to the CRS): “What goes on in Vegas stays in Vegas” and “What goes on in Wyoming (and other states) stays in Wyoming.”
But the best has now finally arrived … Truly amazing.
Assuming that this article is true, apparently now, the Netherlands may be willing to deem Accidental Americans (the one’s who accidentally escaped from America) as tax evaders in the Netherlands!!!! This is amazing. Think of it, now the United States doesn’t even have to charge these criminal “accidental Americans”. All they need do is:
A. Decree that a violation of US law in the Netherlands is actually a violation of the law of the Netherlands; and
B. Get the Netherlands to deal with them under the Dutch justice system.
Fantastic! One more expense that the United States need not pay. In the event that the “accidentals” are incarcerated (for disobeying the Homeland), the Netherlands can pay that cost too.
Russia, China and all other totalitarian regimes should really take note. Nobody does this better than America!
The journalist supplied me with the link on which his story was based. Anyone read Dutch?
https://www.nporadio1.nl/onderzoek/25538-tegenslag-amerikaanse-nederlanders-bankrekening-mag-gesloten
Again, I suspect that the Dutch radio reporter misunderstood something, but I won’t have time to pick through a translation until later today.
It seems his unwise statement that he did not want to pay tax on the sale of a house did not go in his favour when he complained, his complaint was not upheld and went in the banks favour as a result because he had admitted to wishing to evade tax.
There’s no sign whatsoever of the Dutch government rounding people up.
The referral service mentioned in the article Americansoverseas.org are true compliance condors. They act as referral agents for European accountants. (for a fee). Their general scare tactic is ‘comply or else’ All the usual B.S.
“ There’s no sign whatsoever of the Dutch government rounding people up.”
Why is anything less than this just shrugged off? If your FIs are reporting you to the IRS as mine in Japan are or if your FIs are collecting on behalf of the IRS, how much worse can it become?
Well, they could actually round people up. That would be worse.
Here is Google’s relatively decent interpretation of the Dutch text:
A quick summary. Mr. Ariës first said he should not be considered American. That didn’t fly, as one would expect. Then he said that he didn’t want to apply for an SSN in case he might owe US tax on the sale of his house. (He apparently did not realize that applying for an SSN does not mean that one needs to begin filing US tax returns.) The Kifid committee claims that his statement should be regarded as “tax evasion” in some general sense – even though he has not yet sold his home – but this says nothing about whether he could be charged with tax evasion under Dutch law.
The opening statement by the reporter is very confused: “…if [dual citizens] do not report to the American tax authorities, they may be classified by the bank as tax evaders. The bank may then close the customer’s account.” This is nonsense. There is no provision in the IGA for banks to consider customer’s US tax compliance status.
So yeah, I think that, first, the Dutch radio reporter got it wrong and then the English-language journalist amplified the mistake.
How is that worse than having your ID stolen, and taxed twice in an era when most have lost at least some income or all income possibly leading to bankruptcy, eviction and homelessness. Or, as has been happening, suicide?
One need not be “rounded up” to have their live completely destroyed.
JapanT…. My comment was meant to make clear that people refusing to supply a SS number were not being treated as tax evaders in the Netherlands and were not going to be rounded up and thrown in Dutch jails.
I am as outraged by FATCA as anyone, I two can see human rights issues and possibilities that make my blood run cold as other governments just sign any piece of paper shoved in front of them by the USA while apparently oblivious to what they are actually signing.
My own MP thought this was just about making sure “Americans” could not use UK banks to hide their money from fair taxation, bless her.
“ The opening statement by the reporter is very confused: “…if [dual citizens] do not report to the American tax authorities, they may be classified by the bank as tax evaders. The bank may then close the customer’s account.” This is nonsense. There is no provision in the IGA for banks to consider customer’s US tax compliance status.
So yeah, I think that, first, the Dutch radio reporter got it wrong and then the English-language journalist amplified the mistake.”
It is not nonsense. Forget about the stupid IGAs. You must look at what the FIs are actually doing. Banks in Japan are providing the IRS with more than the IGA requires. Sounds like his bank is also requiring more than the IGA requires. Not the first to do so and will not be the last.
Dutch jail or a Dutch street, I do not see that one is a much better place than the other to live.
Sorry, almost as tired of hearing the “At least” argument as I am the “What’s the worst that can possibly?” comment.
They are simply promoting their own version of reality. Maybe it’s true. Maybe it’s not true. But, continually repeating it will not contribute to making it true.
It’s pretty clear that many people have been impacted by FATCA and US citizenship-based taxation.
Unfortunately andy05 hasn’t clarified his post yet, but maybe he has this sort of scenario in mind: Dave the US citizen resident in the UK somehow has a US tax assessed which he is unwilling or unable to pay. He decides to refuse to pay (or is unable to pay) and his bank somehow finds out and then closes his account to avoid “failing to prevent tax evasion” under that 2017 UK Criminal Finance act. Even if the IGA or US / UK tax treaty don’t explicitly say anything about closing accounts held by people who aren’t paying assessed US tax, it might be implicitly allowed or required by that law. Basically the bank would act as if the account was being used by someone resident in another country in an attempt to avoid tax in that country.
My questions are:
– Is there a similar Dutch law being invoked in this case?
– How would a bank find out about non-payment? Direct contact by the US gov via FATCA data? Indirectly by informing the UK gov?
– Is this a realistic scenario?
What makes this incident particularly silly is the fact that Mr. Ariës has not yet sold his house, nor is there any evidence that he would otherwise owe US taxes. The committee has essentially accused him of “thoughtcrime” – wanting to evade US taxes one day in the future.
Without reading Dutch – a major caveat – the way I interpret this is that the committee ruling really only concerns implementation and interpretation of the IGA. The ruling is not surprising: Mr. Ariës *is* a US citizens and he *must* provide his bank with an SSN or CLN. The committee does not say that the bank may close his account – the reporter does. I’d wager that the comments about tax evasion are nothing more than expressions of opinion, carrying no weight.
All that being said, banks going “above and beyond” to do things not required by FATCA remains a serious problem in some countries: reporting more than is technically required (low-balance accounts or possibly account types excluded from the IGA, like RRSPs); threatening to close accounts if customers don’t provide an SSN or CLN; offering only the most basic banking services to US persons. What we haven’t seen much evidence of, beyond Switzerland in the early days, is banks demanding proof of US tax compliance from their customers. And we definitely do not see banks forking over customers’ money directly to the IRS (I say this with a certain amount of caution, lest I raise the ghost of Norman Diamond).
@CoffeeBean
I don’t think what andy05 laid out constitutes a reasonable scenario. But I too would be curious to see a response.
One further thought on this silliness. Since the new “super-streamlined” program allows non-compliant US citizens (who have renounced or who plan to renounce) to file their returns without obtaining a Social Security Number… refusal to obtain an SSN cannot be proof of intent to commit tax evasion.
How do you respond to that logic, Dutch financial services complaints tribunal?
Logic decamped eons ago.