Liberty and justice for all United States persons abroad

The Isaac Brock Society

FATCA and Australia – Part 1 of 2

January 2020:  This thread continues at FATCA and Australia – Part 2 of 2.

 

Let’s Fix the Australia/US Tax Treaty! The Australia/US tax treaty needs urgent revision to prevent double taxation. Get involved at www.FixTheTaxTreaty.org

Australian Americans Overseas 640 x 640

Posts on The Isaac Brock Society website concerning FATCA and Australia

For articles on other websites, see Media and Blog Articles

For general discussion of FATCA, see  FATCA Discussion Thread

For links to some websites and contact info (government, organisations, tax information), see Australia Information Links

***If clicking on a comment link brings you to the wrong page, click here  to get on the most recent page of comments. (alternatively, to reach the most recent comment page, go to  the url in the bar at the top of your browser and delete everything after October 2018

25: John Richardson and Karen Alpert Session in Brisbane Australia Oct 25, 2018

August 2018

01: U.S., U.K., Canada, Australia and Netherlands form international tax enforcement group

January 2018

08: Investing with One Hand Tied Behind Your Back – an Australian Perspective on United States Tax Rules for Non-Resident Citizens

July 2017

18: Australian Greens Senator @LarissaWaters resigns because of her CANADIAN place of birth-Too bad she was born in Canada

March 2017

13: What Lessons Can Be Learned from the Sad Stories of “IRS Compliant” Australians Shaun and Mary?

November 2016

30: “Solving U.S. Citizenship Problems” – Online January 9, 2017 (Australia)

August 2016

25: Let’s Fix the Australia/US Tax Treaty!

May 2016

15: Australia: Dealing with Superannuation

February 2016

19: #Australia funds America’s #FATCA #Ethnic Identification System

September 2012

27: Last Day to make a FATCA submission to the Australian Govt

07: Australia and FATCA

August 2012

28: Australian Government wants YOU to tell them what to do about FATCA

July 2012

20: Australian Financial Services Council lobbies Washington for FATCA exemption

 

1,187 thoughts on “FATCA and Australia – Part 1 of 2”

  1. Thanks for writing the letter JC.

    We need to keep emphasizing that we’re “Australian citizens with US taint” rather than “US citizens resident in Australia”, and the Master Nationality Rule.

  3. Sent JC’s letter to bcc email list

    Just talked to tax treaty people in OZ I am sure they are sympathetic. I sent JC’s letter and asked opinion. It was stated that we are now in a caretaker government at the moment.

    Also wrote to Phil Hogden regarding his request for info on

    “International Tax Conference. A full day of international tax topics specifically concentrating on cross-border tax issues important to humans, families, and entrepreneurs. This is my baby”

    Sent latest documentation from JC for him to look at in regard to our NEW citizenship status to speak for us

    Reply

    Oh yes. Superannuations. The U.S. tax treatment of superannuations is an abomination unto the Lord, if I may reference the Old Testament.

    Phils email phil@hodgen.com

  4. QUOTE OF
    THE DAY
    “Learn from others whom have walked the path before you, but be smart enough to know when to cut your own trail.”
    Narciso Rodriguez

  5. FYI

    Dual Citizen Exception

    This week, let’s look at the dual citizen exception to covered expatriate status.

    When you renounce your U.S. citizenship, you will be characterized as a “covered expatriate” — or not. It is better to not be a covered expatriate. Covered expatriates will probably pay some tax for the privilege of leaving the U.S. tax system behind them.

    There are three reasons why you would be characterized as a “covered expatriate”…. continue reading

    http://hodgen.com/

  6. Gun law is good to bring up in Australia as Australia has relatively strict gun laws compared to the US.

    There is this area where the comparison is not complete. For instance a US person visiting Australia is still covered by US tax and compliance law. Yet as a visitor then that person is unlikely to have accounts, assets, income in Australia, but for it to be in the US. There are rules for tax residency in Australia, generally more than six months.

    I’ll have a go within Australia in regards to this letter in a week.

    Yes Australian Government is in care taker mode now. There always seems to be an excuse. Let’s see if Vasta and Lindgren are returned.If not we have the letters ready to be sent to new MPs and Senators.

    I may only hope that I may use the election to get some extra attention here.

  9. Expats Object to Paying U.S. Taxes
    BY MICHAEL COHN
    MAY 31, 2016 5:13PM ET
    Share Comments A A A
    A new survey of U.S. taxpayers living abroad finds widespread opposition to the Foreign Account Tax Compliance Act, or FATCA, and similar tax compliance requirements.
    The survey, by Greenback Expat Tax Services, a firm that specializes in helping U.S. expatriates with their taxes, found that nearly 70 percent of the survey respondents indicated they don’t believe Americans living abroad should have to file U.S. taxes.
    In addition, nearly 45 percent of the expats surveyed said they would like the U.S. government to repeal FATCA, a law included in the HIRE Act of 2010 that requires foreign financial institutions to report on the accounts of all U.S. taxpayers or else face up to a 30 percent penalty on their income from U.S. sources. That figure was up significantly from a similar survey that Greenback conducted last year, in which only 9 percent of the expats polled said they wanted FATCA repealed. Sen. Rand Paul, R-Ken., has twice introduced legislation to repeal some provisions in FATCA (see Rand Paul Re-introduces Bill to Repeal FATCA Provisions).
    Almost 54 percent of the expats who responded to Greenback’s survey said they would support an initiative in the U.S. to repeal FATCA, while 32 percent of those surveyed said they are affected by FATCA and must file Form 8938. Over 12 percent of the survey respondents said they needed to switch banks because their foreign financial institution doesn’t want to deal with U.S. citizens.

  10. https://www.washingtonpost.com/news/wonk/wp/2016/06/01/why-americans-are-giving-up-citizenship-in-record-numbers/?postshare=2331464810687483&tid=ss_tw

    Why Americans are giving up citizenship in record numbers
    June 1

    Mitchel described one client who plans to retire soon in Australia, where he will not have to pay any taxes on the pension he has built up after 20 years of work there. But under U.S. tax law, he would be required to file a return and pony up to Uncle Sam

  11. @All

    I live in a area which is a community corporation which simply means that the owners of the units collectively own the common area. The board raises money for insurance or maintenance of the community property. The community corporation does not earn any income.

    If the corporation opens a bank account does the bank have to ask if any of the owners for the units in the corporation are US persons?

    Any help appreciated

  12. Hi billy,

    Well, in AU, my then 15 year old daughter (US born/AU cit.) was opening a savings acct. here. The paperwork (which the idiot woman stuffed into an envelope, not seen by me until a month later) stated she (my daughter) had sworn to NOT being US tainted (she hadn’t, at all– which makes me wonder if they’re skirting it or inept?).

    My feeling is that if your particular bank has been “briefed to the hilt”, then they’ll ask.

    It’s all sickening in it’s insinuation into ALL things…Allison Christians, called it-(at 37 mins. in: https://www.youtube.com/watch?v=R__KgHq0vRE ) – she said in her part of the videos in CA that the “wording” was such that every nation gave up “everything” signng to this IGA which most signers didn’t read & which NONE of the signers obviously understood!!

    I hope others here more versed can definitively state otherwise. I just see banks caving to avoid that 30% extortion threat.

  13. The governments spin on FATCA IGA focused on the “reciprocity” of it. There is some December Deadline in regards to reciprocity. It will be very clear that the US is not providing reciprocal information, that there is no law in the US forcing banks to ask the questions to enable the US to provide reciprocal information. One may only hope.

  15. @JakDac and JC,
    I didn’t get around to writing to Senator Lindgren, even though I meant to. I’ve been busy at work and arranging to renounce (appointment set for Thursday 16 June). Now that work has settled down, I figured that as we are in the middle of an election campaign, it would be more productive to write to the leaders of the three major political parties to ask their position on our issues. I wanted to keep it short and simple to increase the likelihood that someone would actually read it. Here’s the letter I came up with – I emailed it out this morning:

    As immigrants to this great country, we are proud to be Australian citizens. We came here over 20 years ago as skilled migrants with young children. Australia has been good to our family. Our children enjoyed a world-class education and are now productive members of society; and our careers as university educators have been rewarding while also allowing us to contribute to the education of Australian youth.

    We are writing to you because we are concerned about the extra-territorial reach of our country of origin in its attempts to tax those Australian citizens and residents whom it also claims as citizens. No, we are not from Eritrea. We were born and raised in the United States of America. The US claims the right to tax the worldwide earnings of US citizens wherever they live, while the rest of the world taxes based on residence rather than citizenship. There are several reasons why Australia should be concerned by US actions in this area:

    1. The US taxes its non-resident citizens as if they were residents, imposing punitive taxes on their non-US “foreign” investments. With these measures the US is draining capital from Australia and eroding the tax base available to support Australian government expenditure. US tax treatment of Australian superannuation is particularly egregious and will result in higher Age Pension entitlements for those affected.
    2. The US defines citizenship broadly, imposes citizenship on anyone born in the US (even if their parents are not US citizens and they leave the US as infants), and charges the highest renunciation fee in the world (USD2,350). This exorbitant fee could be seen as a violation of the right to change one’s nationality as guaranteed in the United Nations Universal Declaration of Human Rights (Article 15).
    3. The US push to identify “tax evaders” (who are compliant Australian taxpayers) has resulted in huge compliance costs for Australian financial institutions via the Foreign Account Tax Compliance Act (FATCA), whereby the US has bullied Australia and almost 200 other countries into turning domestic financial institutions into US Internal Revenue Service (IRS) compliance agents. These costs are borne by all Australians in the form of higher bank fees and/or lower deposit interest.

    So, what can Australia do to address these problems?

    First, the US/Australia tax treaty needs to be re-negotiated as a priority. The re-negotiated treaty should not include the “saving clause” that allows the US to tax US citizens resident in Australia as if they were US residents. In addition, the treaty must ensure the tax favoured status of superannuation under US tax rules for those subject to US tax. The current treaty allows the US to tax Australian superannuation contributions, earnings and withdrawals, sometimes under very punitive rules. Furthermore, the Canada/US tax treaty protects Canadian citizens against the collection of US tax; Australia should negotiate similar protection for Australian citizens.

    Second, under the FATCA Intergovernmental Agreement (IGA), the US committed to reciprocal information exchange. However, the IGA requires Australia to collect far more detail than US law allows the US to collect from its own financial institutions. If the US does not meet its reciprocal obligations by 31 December 2016, the IGA allows a re-visiting of the agreement. Australia should take that opportunity to amend the agreement to exclude all bona fide residents of Australia from the reach of FATCA regardless of US status.

    In the interest of brevity, this letter has included only the most important issues regarding the effect of US extra-territorial tax policy on Australia. In light of the upcoming federal election, we would like to know your party’s position on this issue. We would welcome the opportunity to speak in detail with you or a member of your staff about the implications of these issues for Australia and Australian citizens.

  18. To help instigate change.

    Australia should not go into this thinking the tax treaty/FATCA IGA is an agreement among equals. They are largely one way streets with text dictated by the US. Else then we have the Scott Morrisons in government leaving modification and concern for Australian sovereignty all up to the US to decide, or not.

    Also, I feel there needs to be pointing out that Australian government processes have been broke on these issues for decades. If not broke no need for fixing. Broke!

    Who were these letters sent to?

  19. @JC – I sent the letters to Bill Shorten, Richard Di Natale and the Liberal Party campaign address (you can’t send email directly to the PM while the government is in caretaker mode). I got automatic responses from the first two, but not the third. They were just sent this morning. I’ll report back if I get any real responses.

    Next week when the official candidate list is out, I’m thinking I’ll send it to all of my local electorate candidates and to all of the Queensland Senate candidates from the 3 main parties (my daughter suggests including the Pirate Party on that list as they may have sympathy for our cause).

  21. Go to Twitter retweet away / Many comments from other patriots fighting for what is true justice
    JC Double Taxed
    ‏@JCDoubleTaxed

  23. On Ambassador John Berrys Facebook time to ask him to help

    I have some exciting news to share with you today.

    Serving the U.S.-Australia Alliance as the U.S. Ambassador to Australia for the last three years has been the highest honor of my life. But I have known since I was appointed that my tenure as U.S. Ambassador to Australia would end in 2016. As you may know, like all U.S. ambassadors, I serve at the pleasure of the President, and I was appointed by President Obama, whose term is also winding down…

    So it is with great enthusiasm that I announce that when finished with my duties later this year, I will be moving to New York to serve as the next President of the American Australian Association. The Association was established in 1948 to promote cooperation and understanding between the #UnitedStates and #Australia.

    I am looking forward to this incredible opportunity to continue working to advance, broaden and strengthen ties between our two great countries – the economic, scientific, environmental, educational, cultural, and commercial ties – that transcend politics, politicians, and treaties. I am thrilled to be able to help continue the forward momentum in each of these areas.

    And I am equally thrilled that my new role will give me regular and frequent reasons to return to Australia!

    cc U.S. Embassy Canberra U.S. Consulate General Sydney U.S. Consulate General Melbourne U.S. Consulate General Perth AmCham Australia United States Studies Centre Perth USAsia Centre

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