FATCA and the EU
April 2019
July 2018
06: EU Lawmakers Vote to Kick-Start FATCA Talks With United States
05: Independence Day attempt in European Parliament–the Empire lives well
July 2017
11: Refreshing: @SophieintVeld calls EU answer to plight of #AccidentalAmericans “bullshit”
September 2016
30: #FATCA Came Last to EU, but Mandatory Fingerprinting was First
August 2015
31: Parliamentary Question: Legality of intergovernmental agreements (IGAs) on FATCA
January 2015
10: EU Residents/Citizens: This is For You
September 2014
13: US seeks additional Customs Pre-Clearance locations in the EU
August 2013
24: European Parliament opposes exchanging bank data with the US
June 2013
May 2013
31: Public Hearing on FATCA at the European Parliament in Brussels
23: EU Parliament Hearing on FATCA May 28th
April 2013
04: MEP Sophia In’t Veld discusses FATCA in EU Parliament
March 2013
25: Question and Answer on FATCA in the European Parliament
February 2013
26: EU Tax Chief Urges U.S. Support for Transactions Levy @BloombergNews
April 2012
19: US bullies the EU into sharing passenger data
March 2012
10: Two prominent members of European Parliament raise concern over FATCA five agreement
February 2012
16: Are China, Russia, the EU and Switzerland poised to give in to FATCA?
January 2012
“That is of their own making; legal actions will persist until citizens rights are upheld and protected.”
Actually there’s been very few actions in response to FATCA.
Canada – still stalled;
Israel – failed;
Bopp case – in limbo hoping to be heard by SCOTUS
It will be interesting to see if the French case gets further.
It dawned on me after I posted, that the EC may just be referring to the kind of exploring/discussion that resulted in the IRS relaxing the insane requirement that banks must obtain a USC’s foreign TIN, see https://www.irs.gov/pub/irs-drop/n-17-46.pdf
Undoubtedly helpful; enough of that kind of piecemeal tinkering could certainly make banks less nervous about USCs.
“Of course it is. The EU doesn’t have the power to tax banks!”
Member States can collectively. There is no will to do so as far as I can see (or at least for now)…
@plaxy
“Actually there’s been very few actions in response to FATCA.”
Yes, but there is ongoing reaction. This will not abate/cease until something is done about FATCA in the EU.
@plaxy
“Undoubtedly helpful; enough of that kind of piecemeal tinkering could certainly make banks less nervous about USCs.”
Exempting US-born EU citizens from FATCA would be a start. Wishful thinking perhaps…
On what basis? The banks are presumably already paying taxes and complying with regulations.
@plaxy
“The banks are presumably already paying taxes and complying with regulations.”
Just update the regulations. It might be illegal, but so are the (without Senate approval) IGAs.
“Exempting US-born EU citizens from FATCA would be a start. Wishful thinking perhaps…”
I don’t think the EU wants USCs in the EU to be exempt from FATCA reporting.
“Just update the regulations. It might be illegal, but so are the (without Senate approval) IGAs.”
The IGAs might be illegal under US law, but FATCA withholding certainly isn’t.
@plaxy
“I don’t think the EU wants USCs in the EU to be exempt from FATCA reporting.”
USCs or US-born EUCs? It will always be a coin-flipper…
USCs. Or USPs. US-born EUCs are not reportable.
@plaxy
“The IGAs might be illegal under US law, but FATCA withholding certainly isn’t.”
FATCA withholding underpinned by potentially illegal IGAs would then be potentially illegal, no?
No. The IGAs don’t underpin FATCA withholding.
@plaxy
“USCs. Or USPs. US-born EUCs are not reportable.”
US-born EUCs still have FATCA indicia.
“US-born EUCs still have FATCA indicia.”
Yes, but only the ones who are USCs/USPs are subject to FATCA reporting.
Renunciation is the solution to FATCA.
My view: it would be great if the EU undertook or facilitated renegotiation of the IGAs to make the due diligence less oppressive and give the banks reassurances that USC customers need not be shunned. But I wouldn’t advise anyone considering renunciation to delay it in the hope that things would change. Maybe yes, maybe no, but it’s not going to be any time soon, is my guess.
@plaxy
Your view is reasonable.
We need to bear in mind that the cost to renounce US citizenship is prohibitive, done within a labyrinthine process. Were it cheap and straightforward, I would have done so and disappeared from anti-CBT blogs to lead a normal life.
Yes on the cost – it’s outrageous. But the actual process of renouncing is not difficult.
1. Make an appointment
2. Collect the documentation (passports, forms etc)
3. Go to the consulate, pay, swear, sign. Bye bye US citizenship.
(You then have to wait for the CLN, but while waiting you can use the receipt as proof you have renounced.)
4. Celebrate 🙂
@plaxy
What about the retrospective tax compliance of five years? This is another sticking point. This could easily bankrupt me…
You stop being a USC as soon as you renounce. Assuming you’ve not been filing, don’t start. The IRS doesn’t even know whether you were over the threshold for filing. And they don’t care.
Some of the issues raised here are still relevant to the discussion (almost 5 years later);
http://www.europarl.europa.eu/eplibrary/A-FATCA-for-the-EU-FINAL.pdf
Library Briefing
Library of the European Parliament
27/05/2013
‘A FATCA for the EU?
Data protection aspects of automatic exchange of bank information’
And now? How has the situation changed in light of new data protection laws in the EU?
Am wondering how the 12/02/2018 reply to Mr. Ryan http://ec.europa.eu/newsroom/article29/item-detail.cfm?item_id=614217 from the Article 29 Working Party (on data protection) https://en.wikipedia.org/wiki/Article_29_Data_Protection_Working_Party
compares with some of what they have said earlier in terms of a previous 2013 position on data protection re FATCA, since some of the EU laws have changed more recently (ex. this was stated on 27/05/2013; “…. The Article 29 Working Party (WP) has evaluated the compatibility of the obligations under the US FATCA with the EU Data Protection Directive, setting the legal standard for FATCA-like agreements…” http://www.europarl.europa.eu/eplibrary/A-FATCA-for-the-EU-FINAL.pdf )
Might be worth searching through the archives here http://ec.europa.eu/newsroom/article29/item-detail.cfm?item_id=613101 and their current website to see if anything has changed over time (results of search for ‘fatca’ ex http://collections.internetmemory.org/haeu/20171122154227/http://ec.europa.eu/justice/data-protection/index_en.htm ). I gather that the Article 29 Working Party is to provide ‘independent advice’ to the EU Parl, though it’s not binding.
Just wondering if their comments/advice have shown any movement over the years since member states have implemented the FATCA IGAs and the creation of the OECD CRS. And also now that the EU acknowledges that some EU citizens and residents are facing banking blockouts.
The reason I ask is that when EU bodies refer to the CRS in the context of defending against complaints about FATCA’s application to those with no actual economic connection to the US (ex. ‘accidental Americans’), they do so in what appears to be (a now retroactively) disingenuous attempt to legitimize FATCA’s application to EU citizens and residents despite the glaring difference that the US uses citizenship/birthplace/parentage as a proxy for actual residence and the CRS does not. FATCA IGA signatory countries also do this as a rationalization for having subjected only SOME of their residents to FATCA, on what could be considered discriminatory and illegal grounds (ex. those with inherited or birth US citizenship would be discrimination based on national origin, parentage, birthplace). Our Canadian government also likes to trot out their convenient conflation of FATCA with CRS. The conflating of FATCA with the CRS is pretty disingenous considering that the distortions created by FATCA are at root due to the US being an outlier in terms of equating citizenship/birthplace/parentage as equivalent to actual residency for tax purposes. Thus glossing over that glaring difference, or omitting it entirely is a deliberate sin of ommission.
Either the data protection laws apply to all, or none.
@plaxy
EU citizens resident in Europe affected by FATCA should have their 2.350$ renunciation fee paid for by the national Finance Ministry. Not a far-fetched solution if FATCA must stay in my opinion.
duality – I think that’s a non-starter. No way would they ever be allowed to spend public money on that, even if they wanted to.
badger –
It may be a sin but it’s what they set out to do and it’s what they’ve done: develop a legal basis for automatic exchange of information based on existing bilateral tax treaties. See http://www.g20.utoronto.ca/2013/2013-0419-finance.html
Repost:
From FATCA to CRS, or, Why the EU Commission is unlikely to take action against the FATCA IGAs unless required to do so as a result of an ECJ ruling.
2012 G5 – US Joint Statement:
. …the United States, France, Germany, Italy, Spain and the United Kingdom have agreed to explore a common approach to FATCA implementation through domestic reporting and reciprocal automatic exchange and based on existing bilateral tax treaties.
2013 G20 Finance Communique:
welcome progress made towards automatic exchange of information which is expected to be the standard and urge all jurisdictions to move towards exchanging information automatically with their treaty partners, as appropriate. We look forward to the OECD working with G20 countries to report back on the progress in developing of a new multilateral standard on automatic exchange of information, taking into account country-specific characteristics.
http://www.g20.utoronto.ca/2013/2013-0419-finance.html
Following the G20 communique, “the G8 Presidency requested a report from the OECD to analyse how jurisdictions could build on the recent developments to implement automatic exchange in a multilateral context. It invited reflections on specifications for the information to be exchanged, the legal basis for the exchange and consideration of the necessary platform to exchange the information.
The OECD report identified three legal bases:
With more and more jurisdictions joining the Convention on Mutual Administrative Assistance in Tax Matters there exists a clear legal basis for comprehensive automatic exchange with strict safeguards protecting confidentiality. Bilateral tax treaties also provide such a legal basis and within the European Union, Directives provide a specific legal framework for automatic exchange of information regarding interest income and certain other types of income between its 27 (soon 28) members.
The OECD report accordingly proposes “USING RECENT BILATERAL AGREEMENTS TO ADVANCE TOWARDS A STANDARDISED MULTILATERAL MODEL.”
http://www.oecd.org/ctp/exchange-of-tax-information/taxtransparency_G8report.pdf