FATCA and Australia – Part 1 of 2

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

1. An “innovation box”? How exciting! Ok, I have to admit I was really hoping for a “clever idea hollow gourd,” but this sounds almost as good. When do we get to open it?

2. For those wondering, an “innovation box” is a system for applying lower tax rates on profits developed from intellectual capital. The UK and, from memory, Holland have such systems in place. https://en.wikipedia.org/wiki/Patent_Box

3. Oh dear, that sounds considerably less festive than what I was envisioning.

   But I’m sure they must have been absolutely flooded with requests for this, way more than they got for RBT for example, if this was the teaser they chose to leak. I am hesitant to go look up the tragic stories of lives ruined for lack of an innovation box. Surely powerful reading.

4. 8.7 million votes good start (size of some states)

   http://isaacbrocksociety.ca/2015/04/29/senate-finance-committee-posts-submissions-and-shadow-raider-reports-to-brock/#comments

   8.7 million expats eager to vote experiencing US taxation when living overseas most (or all) of their life. We fought against this in the Revolutionary War please assist
   ·
   https://www.facebook.com/DonaldTrump

5. https://twitter.com/realDonaldTrump/with_replies

6. June 26
   After having been provided additional time to finalize their proposals for consideration by the full Committee, the Senate Finance Committee Tax Reform Working Groups are due to submit their proposals by this Friday, June 26

7. Just called 202 224 4515 person not at desk thus emailing You can too

   julia_lawless@finance.senate.gov

   Re: International Tax Working Group to report back to the committee by June 26 Please advise where we can access the report Cheers JD

   International Tax Working Group

   http://blogs.rollcall.com/topic-a-tax-finance/tax-reform-moves-to-back-burner-but-debate-remains-active/

   The Senate Finance Committee chairman, Senator Orrin Hatch (R-UT), has established working groups to study different aspects of the tax system. These working groups are scheduled to report back to the committee by June 26.

8. Other press contacts

   aaron_fobes@finance.senate.gov

   amelia_breinig@finance.senate.gov

9. Interesting called again talked to a staffer that read some submissions seemed sympathetic and said they did not realise this was happening. Shows we HAVE to get the word out.
   Fingers crossed

10. Maybe tweet press people at Senate committee ?

    https://twitter.com/ameliabreinig

    https://twitter.com/aaron_fobes

    https://twitter.com/lawlessonthehil

11. Staffer said Amelia stated postponed till July 2

12. Maybe we may celebrate this July 4th

13. Lawless, Julia (Finance)
    2:49 AM (6 hours ago)

    to me
    Hi Jak,

    It won’t be today. The Finance Committee’s bipartisan tax working groups are continuing to make progress and plan to continue their work through the recess to finish reports to the Chairman and Ranking Member.

    Thanks,
    Julia

    From: Jak Dac
    Sent: Friday, June 26, 2015 10:08 AM
    To: Lawless, Julia (Finance)
    Subject: Re: International Tax Working Group to report back to the committee by June 26 Please advise where we can access the report Cheers JD

    Jak Dac
    8:55 AM
    to Julia
    Is there any relief for government mandated pensions that are earned and taxed in the expats country ?

    Cheers JD

14. No Bills from Senate Tax Reform Groups

    In January, Senate Finance Committee Chair Orrin Hatch (R-UT) appointed bipartisan working groups of senators to study personal, corporate and international tax law options.

    The five groups and their co-chairs are as follows:

    Individual Income Taxes – Sens. Chuck Grassley (R-IA), Mike Enzi (R-WY), Debbie Stabenow (D-MI).

    Business Income Tax – Sens. John Thune (R-SD), Ben Cardin (D-MD).

    Savings and Investment – Sens. Mike Crapo (R-ID), Sherrod Brown (D-OH).

    International Taxation – Sens. Rob Portman (R-OH), Chuck Schumer (D-NY).

    Community Development – Sens. Dean Heller (R-NV), Michael Bennet (D-CO).

    All of the working groups expect to conclude their work by the end of June. Most of the five groups will publish reports of their discussions. None are expected to offer legislation.

    Sen. Rob Portman indicated that the International Tax Reform group was waiting for scoring on their various provisions from the Joint Committee on Taxation. Sen. Sherrod Brown suggested that there may be some “efforts to boost access to savings among middle-income Americans” in their report.

    Sen. Ron Wyden noted that the International Tax Reform discussions have lead him to a new openness to consider patent and innovation boxes. Sen. John Thune mentioned the concept of tax reform with revenue from reform being used to fund the current highway bill. Thune stated, “I do not think we are going to get to any kind of full-blown tax reform in time to do the pay-fors for the highway bill.”

    Finally, Sen. Ben Cardin indicated that the business tax group discovered that, “It is expensive to lower rates because you have to deal with the business aspects of personal income tax as well as the corporate tax.” Cardin concluded, “Getting a major bill or any bill done in this political climate will be a challenge.”

    Editor’s Note: Both the House and Senate taxwriting committees now have placed tax reform legislation on hold. The focus is shifting to tax extenders such as the IRA charitable rollover. Will the tax extenders be for one year or two years? Will some of the extenders be made permanent? When will the bill pass? Stay tuned for further developments.

    http://dclegacy.org/?pageID=38

15. They’re down to the wire on the Hill…at least in Senate-time. The Senate Finance Committee’s tax reform working groups now have until early July to finish their work. They were first supposed to wrap up at the end of May, then the end of June. Meanwhile, Finance panel Chair Orrin Hatch won’t raise taxes to pay for highway funding, but The Hill reports that Senate Democratic leaders want a six-year, $478 billion transportation bill largely funded by taxing corporate profits held offshore. They insist a short-term highway funding extension would be “very hard” to accept. It may get easier. Funding authority for the Highway Trust Fund ends in a month. – See more at: http://taxvox.taxpolicycenter.org/2015/06/29/one-more-step-for-equality-and-two-views-on-state-eitcs/#sthash.5d8bKdkc.dpuf

    http://taxvox.taxpolicycenter.org/2015/06/29/one-more-step-for-equality-and-two-views-on-state-eitcs/

16. Received an email from Niels (AMCHAM Australia) including

    Another AmCham preoccupation since last month has been taxation issues. I want to thank Chris Morris of PwC for chairing our newly-constituted Taxation Committee; let me know if you are interested in participating or hearing more about it. Part of our delegation will meet in Washington next week with the US Treasury to push again for the early resumption of bilateral tax negotiations between the US and Australia. Check our recent letter outlining our position on a number of shortcomings that can only be addressed if bilateral talks resume, including ceasing the unfair taxation by the IRS of Australian superannuation

17. No breakthrough, Jak, but I do see a path forward based on talks there last week. Let me first consult with the Tax Committee first, but you will hear about it!

    Cheers, Niels

18. Survey says: 35 percent of Americans would expatriate
    Wednesday, 1 Jul 2015 | 8:00 AM ET
    CNBC.com

    The word is getting out

    Comments go on forever ( 5482 Comments) many interesting

    FromPatriotToExPatriate
    There are four kinds of Amrericans divided into two groups:
    Group A – Americans living outside the United States who pay taxes to their country of residence
    1. Those who are forced to renounce U.S. citizenship. This group consists of Americans abroad, who ATTEMPT to be U.S. tax compliant, but find (as Nina Olsen of IRS Taxpayer Advocate) would confirm, that it is almost impossible. They live under constant threats of fines and penalties and general fear of the U.S. Government. They are no being hunted by FATCA. If you were “hunted” you would renounce too. They do the only thing they can do – renounce U.S. citizenship. Interestingly, they really wish they could comply with all the U.S. laws and regulations. They just can’t.
    What is particularly interesting about this group is that:
    It is their desire to comply with U.S. laws that leads to the renunciations

    http://www.cnbc.com/id/102799503

19. I believe many people are ignorant of the “Oh my God” moment (as in comments)
    2. Americans abroad who make no attempt at U.S. tax compliance. They live in a blissful state of ignorance (FATCA will soon change that) and they don’t really think about U.S. citizenship. Hence, renunciation is not on their radar. But, wait to they get that FATCA letter. They will renounce.

20. A spokeswoman for Finance Committee Chairman Orrin Hatch was quoted as saying that the groups, whose reports were due before Congress adjourned for the Fourth of July holiday, will now have until early July to develop their proposals.

    http://www.ey.com/GL/en/Services/Tax/International-Tax/Alert–Report-on-recent-US-international-tax-developments—2-July-2015

21. ALSO NOTE

    It remains unclear whether the working group recommendations will be made public.

22. Editor’s Note: Both the House and Senate taxwriting committees now have placed tax reform legislation on hold. The focus is shifting to tax extenders such as the IRA charitable rollover. Will the tax extenders be for one year or two years? Will some of the extenders be made permanent? When will the bill pass? Stay tuned for further developments.

    http://bacgift.org/?pageID=38

23. Forty-eight percent of the 370 expats surveyed say they would vote for a presidential candidate who promises to repeal FATCA, a global tax law that has been in affect for a year. Twenty-nine percent say they would not vote for that candidate and 23 percent say they do not know. There are 7.6 million Americans living abroad.

    http://www.fa-mag.com/news/many-expats-oppose-foreign-tax-law-22301.html

24. Opinion: U.S. Expats Could Make a Difference in 2016 Presidential Race
    http://blogs.wsj.com/expat/2015/07/03/opinion-u-s-expats-could-make-a-difference-in-2016-presidential-race/

25. Finance Working Groups Set To Release Proposals As Tax-Writers Continue To Focus On International Tax Reform

    By Brandon Roman on July 6th, 2015
    Posted in Tax and Retirement
    Legislative Activity
    Deadline for Senate Finance Committee Working Groups’ Proposals Nears, Talk of International Tax Reform Continues
    After being delayed for a second time, the Senate Finance Committee Tax Reform Working Groups are expected to submit their reports to the full Committee on Tuesday, July 7. Presently, it is unclear the extent to which (if at all) the reports will be made public, although it appears that this will be left to the discretion of the various groups’ co-chairs.

    In addition to timing, it is also uncertain at this time what the final recommendations will look like. While the recommendations are unlikely to be tied to specific legislative proposals, it is likely that some of the Working Groups’ proposals – especially the International Tax Working Group – will be quite detailed. Moreover, with regard to international tax reform specifically, the Organisation for Economic Co-operation and Development’s (OECD) efforts to combat base erosion and profit shifting (BEPS) have created a particular sense of urgency among lawmakers to reform the country’s current system of international taxation. However, while the OECD BEPS efforts have had an impact on the timing of reform, it does not appear that the International Tax Working Group is particularly vested in the Obama Administration’s recommendations to the OECD.

    Relatedly, it appears that the future of any reforms to the U.S. tax Code this year are likely to be linked with how Congress chooses to proceed on funding the Highway Trust Fund. In the Senate, Majority Leader Mitch McConnell (R-KY) is hoping to move a two-year highway bill, as well as a package of two-year tax extenders, before highway funding expires on July 31. On the House side, however, tax-writers are likely to pursue a highway patch through the end of the year, with a six-year highway bill, a package of permanent tax extenders, and international tax reform all to be addressed later this year. While it is presently unclear what approach will triumph, the ultimate outcome may be impacted by timing constraints.

    http://www.capitalthinkingblog.com/2015/07/7927/

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