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
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
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
July 2017
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
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
@AU – Reposted
We have similar circumstance, born in US, parents migrated to AUS in 1972, I was 5, my wife also born in US was 1 year old when her parents migrated. We obtained AUS citizenship 2012, (wish it was prior 2004). There are alot of AUS dual citizens / perm residence living here that I know of.
We operate a business and employ and provide jobs to 80 people including Australians and 457 Visa immigrants, we don’t discriminate and we contribute to the Australian economy. This business was started by my US / AUS dual citizen parents. How dare the AUS politician treat us in this respect.
Did you know to unravel yourself from this US FATCA mess, despite relinquishing US citizenship you need a Cert Loss of Nationality from the US consulate to please the bank. The CLN will trigger an exit tax and confiscate business and private capital assets built in Australia.
I would love to challenge that MP that wagged their finger at your face that it is your obligation to “comply with American Tax Law”. That is an extreme uneducated comment by a typical mealy mouthed bureaucrat. Don’t forget MPs work for us, we don’t work for them. Our US taint also pays taxes and employs the bureaucrats in Canberra.
” Australian politicians have no idea what FATCA is and need educating that the Government of Australia has agreed to help the United States impose U.S. taxes on “certain Australian citizens and residents”. .
Our government needs to protect its “certain law abiding Australian citizens and residence” from U.S. extra-territorial laws.
@Alby and All
It is good the here from someone in Australia about this stuff. Have you had any contact with the Australian treasury or MPs with regards to the problems with US citizenship based taxation and the impacts on your business? Could you share there responses?
How do other people you know in Australia in our situation feel about what is happening with FATCA?
Have you any questions from the Australian banks yet?
Why do you wish that you obtained AUS citizenship prior to 2004?
@Au Some think it very easy to ditch US citizenship.
Agreed Australia is abrogating its responsibilities to protect Australian Citizens and residents from unreasonable US extraterritorial laws. The ATO website says that tax treaties prevent double taxation without footnote for the Australian-US tax treaty. Hear no evil, see no evil – as in tax treaty gaps guaranteeing double taxation – is no evil to them. Tax is an obtuse topic for many. When one tax system – US – gets layered over another then it becomes unfathomable. You might check my post out here: http://isaacbrocksociety.ca/fatca-and-australia/comment-page-2/#comment-6155282
@AU
Actually we are see”ing our local MP tomorrow.
I briefly talked to the MP 2 months ago about FATCA and it’s impact and she said to highlight our concerns so she could inform Joe Hockey’s office. So 2 months later we have managed to get official meeting where we can educate them on the lack of protection for its certain AUS citizens / residents. I almost gave up hope as it seemed they were avoiding the issue. I attached in email to the MP the submissions made to the AUS treasury last year from AMCHAM, Superannuation Assocn, anonymous Joe Citizen, and US tax advocate Nina Olsen submission to the US Senate Finance committee.
I”ll update after the meeting.
I haven’t talked to anyone in Treasury, but will be next step if no response from MP. I can engage lobbyists for this.
Other US AUS duals i know seem to lack inertia, there’s a lack of understanding and knowledge. We”ll see that inertia change upon receipt of a bank letter. Some US AUS Duals also own large businesses and will qualify with bank account greater than $50k which is a trigger for FATCA bank letter.
We haven’t received a FATCA bank letter yet. If your US Tainted bank account has less than $50k value you won’t trigger a FATCA letter. Are you aware of that? Have you read the US AUS FATCA IGA?
CLN weren’t required prior to 2004, look on the right of this sites side bar and read the link http://isaacbrocksociety.ca/relinquishing-acts-performed-prior-to-2004/
I am also unsure what the IRS can do in Australia on non US tax compliant “AUS citizens. We are thinking getting individual ruling from the ATO as this develops to determine ATO position..
@Alby, JC and all
Speaking to Australian Treasury and MP’s they just simply say that I am a US citizen. I explain to them that I feel threatened by the US and feel unfairly treated. They just say but you are a US citizen. I explain the impact this has had on my family and the say again but you are a US citizen. I also explain that other dual citizen nationalities are not treated like this and the say but US taxes on citizenship and we support them with this.
I have read the treasury response to FATCA and I do not think that they mentioned the citizenship based taxation problem at all. The response from treasury was about the banks and protecting them from withholding taxes and the cheapest way to comply. I wonder if Joe Hockey even understands all the problems.
I have asked why when Australia is so concerned about its debt and deficit why are we allowing Australian income earned in Australia by Australian citizens living in Australia to be taxed by another country. They simply say but you are a US citizen.
@JC
Thanks, don’t worry I have read your post, and all the others. I sent the JOE Citizen to the MP
Look on page 46 of EXPLANATORY MEMORANDUM
TAX LAWS AMENDMENT (IMPLEMENTATION OF THE FATCA AGREEMENT ) BILL 2014
3.71 FATCA requires the interrogation or closure of customer
accounts based on US citizenship. A person‘s citizenship refers to their
nationality. The fact that FATCA specifically targets US citizens means
that it is specifically targeting certain persons, based on their nationality.
3.72 It is unlikely that this would be inconsistent with
Commonwealth laws governing discrimination on the grounds of race.
For the purposes of the Racial Discrimination Act 1975, and under
Australian courts‘ jurisprudence in relation to that Act, a distinction made
on the basis of a person‘s citizenship is not a distinction based on race,
colour, descent or national or ethnic origin.
3.73 A distinction based on nationality may, however, be inconsistent
with some Australian State and Territory laws governing discrimination
on the grounds of race, on the basis that, race is defined in these laws as
including nationality (which would refer to citizenship). This means that,
in contrast to Commonwealth laws governing discrimination on the
grounds of race, it is generally unlawful to discriminate on the basis of a
person‘s nationality in certain Australian States and Territories.
There is grounds for discrimination on the grounds of race including nationality in Australian territory and state laws. I claim that I am discriminated against.
@AU
Are you a US AUS Dual? If so then you are also an Australian citizen, that pays AUS taxes.
Your predominant nationality is Australian
Read this link Dominant nationality and why it matters, in the side bar
I only have a AUS passport, never had a US passport.
This type of response from govt is a wrong attitude to its taxpayers.
Great to see activity in Aussie the more the merrier.I have sent emails to Joe, Kim Beasley US Ambassador and ALL treasurers. I also keep the tax treaty people in the picture..I believe the US is lax on sitting down for a new Tax Treaty which if based on the 2006 model would help to alleviate Super taxed by the IRS a main concern for MANY US citizens. Why is the pre 2004 Aussie citizenship important ?
Go to the Treasurers page copy and paste your opinions (share here) email all. I believe the Tax Treaty people would assist if asked by the Treasurer. We could all work together (Skype)
Re: Why do you wish that you obtained AUS citizenship prior to 2004?
I believe this refers if you “gave up” your US citizenship NOT if you just became a dual correct?
I HOPE I AM WRONG
Read this link http://isaacbrocksociety.ca/2012/06/19/if-your-expatriation-date-is-before-2004-the-rules-are-different/ in the right side bar.
Prior to 2004 I believe CLN not required and not subject to Covered Expatriate status.
For those who properly ceased to be US citizens (e.g., by naturalizing in Canada with the requisite intention to no longer be US citizens) prior to enactment of the American Jobs Creation Act of 2004, the expatriation rules should not apply (notwithstanding the very poor manner in which section 877A of the Internal Revenue Code is drafted).
Myself I have relinquished US citizenship 2012 by becoming naturalised Aus. And the CLN rule applys and I am a covered expatriate if I was to expose myself to the US system via the CLN process. I don’t consider myself a Dual as I only have an Australian passport and never had a US passport.
But the IRS would consider me still a US citizen for tax purposes.
That’s way I understand it.
@All,
I am a Dual Australian/US Citizen. I only kept the US side because it never gave me any problems. When I naturalised Australian (1998) if Australia had asked me to give up my US citizenship I would have been happy to do so. As I left the US so young I have never felt like a US person. I did have a US passport when I was young and that was only to see relatives in the US with my parents. I have never voted in the US elections. I live in Australia and Australia is home which is why it is hard to believe that Australia would treat me and people like me like the are.
I have tried the talk the Australian MP’s about why you allow the Australian/US citizens to be treated different in Australia than other nationalities that also hold Australian Citizenship without a real response.
I have heard that the CBA are sending letters to every existing customer about FATCA. I do not bank with the CBA can anyone confirm this?
AU. You naturalized in 1998. Make an appointment with a uS consulate and make it clear that when you did so it was your intent to give up US citizenship. Since that was your intent, you are no longer a U.S. citizen and are entitled to a CLN. There is no fee and you have no tax filing obligations. The only possible fly in the ointment is if you were under 18 when you naturalized.
@Au
I could have been at same ceremony
@Portland PLC
Unfortunately I guess if one used US Passport to enter US to visit relative this may negate such a claim
Hope I am wrong
included in
http://isaacbrocksociety.ca/fatca-and-australia/comment-page-2/#comment-6155282
Many contact details for US reps
Google Voice and Grooveip lite (Android) Call US telephones for free
@ JakDak and Au,
Au might be okay re the passport. You (Au) wrote:
Do you mean “when I was young” as before you became an Australian citizen? Hope so!
If US passport used after relinquishing act, it has not always been fatal to a relinquishment claim, but the odds of success are not good, particularly from reports we’ve received here in the past year. I wouldn’t say it’s a definite no, but it is definitely problematic.
https://www.commbank.com.au/about-us/who-we-are/sustainability/sustainable-business-practices/fatca.html
@pacifica777, All
Looked into CLN but because I have travelled to US various times (for family reasons) was advised that it may not be so easy.
Speaking to the Australian Treasury led us to further frustration. Anyone had any luck? We did not.
au. Difficult maybe. Impossible not. Several people here havE had relinquishment approved in spite of using baUS passport. When you became an Australian, you intended to relinquish. Intent is supposed to be determined by the balance of probabilities or preponderance of evidence. I.E. More likely than not. This is the standard of proof that applies. This is a civil not a criminal matter.
You only used your US passport to travel to the states because you hadn’t yet applied for a CLN and because you were told that you were supposed to. You were travelling half way round the world and didn’t want any trouble when you got there.
Can we Skype ? Somehow get in contact ? Contact Carol and ask to contact each other ?
Goes for every US Citizen in Aussie
@Alby – I am very interested in this meeting. Thanks for sending my Joe Citizen letter – I think I published three here earlier in the thread. I would have preferred your notes in preparation for that meeting to be posted here for comment and collaboration.
The Australian – US Tax Treaty is broke. A technical term is “Tax Treaty Gaps” through which there is no “protection” from double taxation. Superannuation is a good example. I elaborate on the unfairness of the US Treasury Department definition of how it all works – treating each type of tax by itself meaning no credits from other taxes way higher than in the US (such as on wages, interest, GST, on super) may be applied to taxes the US has but not Australia or where the US tax is much higher: example ObamaCare Investment Tax, or 15% US dividend tax effective if you are below the 45% tax rate and fully effective if you are at 30% rate or below. The US also ignores the Australian tax free threshold- as the US threshold is lower.
From my earlier letter, I think I overdid it on the estate tax, there should be I believe 5+ million exemption when going to nonUS citizen spouse.
http://www.forbes.com/sites/robertwood/2015/02/11/thousands-renounce-u-s-citizenship-hitting-new-record-not-just-over-taxes/?commentId=comment_blogAndPostId%2Fblog%2Fcomment%2F1057-33134-10026
Greetings fellow Commonwealth Citizen Brockers on Australia!!!
Guys, you are being too friendly in your debate and its time to adopt what the LGBT community adopted in its lobbying, an in your face approach with things that frankly are rather uncomfortable.
What do I mean?
1. You need to call anyone that calls you a hyphenated Australia as RACIST. Be that a person at the bank or a politician or your neighbor.
2. I grew up in a community of Holocaust survivors. I have no problem bringing up and comparing the Nuremberg Laws of the 1935 Nazi Party with the persuit of “American Blood.” I suggest you read on the classfication system they used to determine pure and partial pure German.
You need to ask the uncomfortable question why does the IGA ask place of birth but it does not ask if one or both parents are USC? You need to make an uncomfortable inference on that.
Is an Australian born in Australia with two USC parents a PURER Australian and does not merit ratting out like an Australian born in the USA to two Australian Citizens? Both are USC under FATCA but not in the Australian IGA.
You need to ask these questions because they are uncomfortable questions.
You need to make them squirm that they are considering you less of an Australian than any other Australian. Call them racist and do not let them get away from it.
You need to follow ALL meetings up in writing and demand a reply in writing, sending your letter by Registered Post.
—
@Moderator, I think Brock needs to have a front page article so we can all contribute on who escapes the FATCA web and who does not in order to show how it is so discriminatory.
Call it the Nuremberg test or the Harry Potter test.
I found a legal site which has a good link to what’s expected:
http://www.kwm.com/en/au/knowledge/insights/saved-by-the-iga-australia-and-the-us-sign-fatca-intergovernmental-agreement-20140427
I especially like the first “disadvantage”:
“There is no escape, you must comply with FATCA”
THERE IS NO ESCAPE
Wow!
All
Well we had 1.5 hour meet with MP and advisor.
Started by introducing our migration history and current life in Australia as Aussies, family, businesses, jobs, networks, community, social ties intertwined into fabric of Australian society.
We each discussed how FATCA will affect us personally on how our banks upon discovering US indicia will be requiring proof of non US connection. Obtaining a CLN and its ramifications on confiscating Australian capital to the US, and it’s draconian penalties. FBAR compliance, penalties. Explained the differences between relinquishing as a US national, but still a US tax citizen.
Told them of the Republicans Rand Paul lawsuit challenging the unconstitutionality of IGA, the Canadian challenge, how grassroots people have raised $500,000 to challenge the Canadian govt, and the recent 2 day injunction hearing to stop handover of Canadian citizens financial to the IRS. Sept 13 is D day, they are interested see what eventuates.
Also the Canadians finance minister stated CRA won’t collect IRS tax or penalties. Will ATO do same?
Bank account closures on US tainted persons around the world.
@JC we discussed and exposed all tax treaty gaps, and discussed all the points you raised in your post, in particular capital gains tax, superannuation. We had accountant with us (also on steep FATCA learning curve) who explained a lot and the cost of US form filing, and the differences in the US tax system , including horrendous cost to comply and/or extricate out of US. There are no US tax preparers available locally, so how to comply?? accountant would have to subby the work out. I even read out the 10 commandments from here. Covers a lot here.
https://citizenshiptaxation.wordpress.com/2015/06/30/part-3-living-clean-how-to-live-outside-the-united-states-in-an-fbar-and-fatca-world/ (I emailed them part 1,2,3 of these links as well)
@George , we did talk about there is nationality race discrimination in local state law, but not commonwealth laws. This IGA is a convoluted and full of holes to appease the US master which held a nuclear weapon to Australia head. Talked about why are we treated differently to you, we require to be treated equally as other Australians and not be discriminated against due to our birthplace. We require government to recognise we are real people and ask for full protection and not just appease the banks, finance industry. We have no representation and no advocacy, who do we turn to for help?
MP and advisor I feel were extremely impacted by our plight (tears were shed all around when one of us read out a letter on the emotional impact on our family and lives, on how FATCA has created fear, anxiety, and we are pleading, beseeching you for help)
That was a very powerful moment when there is silence around the table afterward.
That was the sucker punch. It really hit home to them.
MP is going to talk to Treasury people urgently, to inform of our situations. Also going to inquire what ATO position is on collection of IRS taxes penalties in AUS.
Would be good to get more exposure to US duals in AUS via the media.