FATCA Discussion Thread (Ask your questions) Part Two
Please ask your questions here about FATCA.
Participants will need to provide their e-mail address (real or fake) and an alias. The only written rule is that participants must use a same alias each time they post (and not “anonymous” or derivatives thereof).
Bear in mind that any responses that you get from participants is peer-to-peer help, and it is not intended as a replacement for professional advice. Also, the Isaac Brock Society provides this disclaimer: neither the Society nor any of its members are professionals. We offer our advice here only in friendship and we recommend that our readers seek professional advice if they need it.
If you wish to receive an e-mail notification of comments, check the box to that effect when making your first comment.
NB: This discussion is a continuation of an older discussion that became too large for our software to handle well. See FATCA Discussion Thread (Ask your questions) for earlier discussion.
@Badger, I would be genuinely surprised if Flaherty does NOT announce an IGA soon. It’s obviously coming – banks know it. It is unlikely IMHO that any subclass of ‘US persons’ will be excluded. The most we can hope for I think is that all registered accounts, not just RRSPs – will be excluded, accounts won’t be closed for recalcitrants, and banks won’t look too hard for the witches.
That doesn’t meant the fight is over though!
In case this hasn’t been posted yet:
http://business.inquirer.net/143589/asian-lenders-worried-over-us-foreign-account-law
@bubblebustin – glad to see that the many US taxpayers in Ulanbaatar, Mongolia will be paying their ‘fair share’ of the US deficit. That may make all the difference. Hope they can find a way to translate all those Mongolian documents into FATCA and FBAR language, and find a local IRS Enrolled agent to help them understand their US obligations.
@badger
You made me laugh.
In the yearly budget proposal, a great reason for not living in Sweden. p 487
http://www.riksdagen.se/sv/Dokument-Lagar/Forslag/Propositioner-och-skrivelser/Budgetproposition-2014-Forslag_H1031/
http://data.riksdagen.se/fil/2FC2696F-8F7D-49EA-88CE-D659036BEE15
6:39 The international development to counter tax evasion
The design of the national tax system, how the different national tax systems interact and opportunities , especially for multinational companies to exploit the differences in the systems to achieve the tax benefits, the issues in the
past year has been discussed in many international contexts. There is a new international determination to improve and streamline international cooperation to combat tax evasion , whether it be through the use of imperfections and gaps in regulations, fraud , or by means of special tax regimes. Sweden and the Swedish tax base is also affected by tax evasion arising in the international environment. The OECD has long been engaged in work in the field but has – with the strong support of the G20 – the countries – in the spring of 2013 launched a new large and comprehensive effort to revise the international tax principles in key areas in order to prevent tax base erosion and movement of profits ( Base Erosion and Profit Shifting , Beps project) . OECD Tax Committee adopted at the end of June 2013 a plan of action for Beps . The plan describes 15 different areas of action that you should work on and a schedule for work . The Government supports this important work . The OECD’s important work to consider and reform international tax principles in key areas , Sweden participates actively in the various working groups that perform the actual work . The Government , as stated in expenditure area 3, Section 3.4, allowing Sweden to contribute to the funding. At the meeting in Moscow on 19-20 July 2013 also gave the G20 finance ministers and central bank governors, their support for the work of the OECD , which was confirmed at the G20 meeting in Saint Petersburg on 5-6 September 2013. In a commonly expressed September 4, 2013 by Denmark, Finland , Iceland , Norway, Sweden and the United States was stated that the fight against tax evasion and avoidance should be a top priority in all relevant international forums. The G20 is also supported for the development of a worldwide standard for the automatic exchange of information in tax matters. This issue has also been discussed intensively in the international arena in the spring. The reasons for developing an international standard for the automatic exchange of tax – related information has increased considerably since the United States has enacted legislation means that you will require agreements either with
PROP 2013/14 : 1
488
financial institutions or directly with individual states , to automatically provide information about capital assets and capital income as American people have in financial institutions outside the United States (Foreign Account Tax Compliance Act , FATCA ) . Such so-called FATCA agreements concluded or to be concluded by several countries. United Kingdom, Germany , France, Spain and Italy , together with the United States established a model for such agreements. FATCA agreements is an important piece of the puzzle for the work undertaken by the OECD to develop an international standard for automatic information exchange. Sweden is negotiating with the U.S. on a FATCA agreement . The negotiations are conducted with the objective of the Agreement shall be applied at the earliest from 1 July 2014. The Government intends to return to the parliament . In the EU, the European Commission proposed that the automatic exchange of information on the direct tax area under the Directive on administrative cooperation in tax matters should be extended to the corresponding information to be exchanged under FATCA agreements. Negotiations in the Council on the proposal will continue in the fall. Sweden has welcomed the Commission ‘s proposal. The Government is committed to reporting to be as easy to manage for companies as possible and to avoid the creation of standards for information exchange. The fight against fraud is an issue that has been high on the EU agenda for several years. It has not been easy to achieve concrete results . In the field of VAT , however, could ECOFIN Council June 21, 2013 to agree on a package of measures to discourage cheating by agreeing to a fast mechanism to introduce reverse charge and extending the possibilities of Member States to apply the reverse charge on certain goods and services that are especially sensitive to fraud. The directives came into force in August 2013. Sweden has actively contributed to the work to reach agreement on these measures against tax evasion. Although the idea of a more effective taxation of savings income in the form of interest payments ( Savings Directive) was presented by the Commission in 2008 , it has not been possible to reach agreement in the Council. However, there is reason to emphasize that now Luxembourg during the spring of 2013 declared that 2015, switching to automatic exchange of information under the current savings directive . The ECOFIN Council of 14 May 2013 , Member States could , however, as a first step towards a final agreement on a revised and expanded the Savings Directive to agree on the Commission to open negotiations with such Switzerland to implement the new directive effectively . The proposal for a new Directive was negotiated in the Council , particularly during the Swedish Presidency in autumn 2009 , is the basis for negotiations. The Government welcomes this development and will actively support the ongoing work. Since 2006 , Sweden participates in a joint Nordic project which aims to build an information exchange agreements with countries and jurisdictions that have extensive privacy of taxation. The project has been very successful and now Sweden has signed nearly 40 agreements , which means that Sweden has one of the world ‘s largest network of information exchange agreements with such countries and jurisdictions. The Government intends to continue this work in the autumn of 2013, in order to further develop Sweden’s network of information exchange agreements .
@Mark Twain.
Is Sweden changing their tax system to citizen based tax system like the USA, otherwise it seems to be apples and oranges. The US congress already said their will be no bank info exchanged from the US banks..This seems so crazy.
They are co-dependent. They have no perspective that they will be getting nothing. They are focused upon “transparency”, that giving up information will result in getting info back, which it won’t. The sick thing is that there is no one in USA that sends their Money to Sweden to avoid taxes, whereas indeed there are lots of Swedestrying to send their Money to anyplace that doesn’t have the horrendous marginal rates that Sweden has.
As corrupt as things are, no doubt Stack O Lies is offering them John Doe searches of USA banks on the side, as a substitute for the DATCA that they can’t deliver.
Swedish tax authorities are also pretty aggressive at trying to go after anything that they can get their hands on. They are especially aggressive about foreign registered corps of their residents, of people who work internationally but keep a Residence in Sweden (those that aren’t well-connected), and those that spend too much time in Sweden while being registered somewhere else.
The majority, though, is the poor schmucks who work internationally who keep a Connection back home in Sweden. It’s not a problem for the old Money types, as such behavior is expected and accepted. But not allowed for normal schmucks or up-and-comers.
How does a John Doe search work?
northernstar,
http://www.moodystax.com/trick-or-treaty-are-canadians-next-as-irs-takes-historic-first-step/
http://www.canadianbusiness.com/blogs-and-comment/irs-john-doe-summons/ says:
@NorthernStar…
I had a post about the new John Doe process that the IRS started on behalf of Norway for the first time in history…
John Doe is DATCA (FATCA IGA reciprocity) by another means…
…and there’s that name again: Robert Stack.
I like Mark’s name for him… “Stack O Lies” It really sums him up well.
Hey, Love the name “Robert Stack”, as in the actor who played Elliot Ness of The Untouchables when I was a kid.
Let us remember that it wasn’t Elliot Ness and the Untouchables who finally put Al Capone in prison, it was the IRS. Yes, they put Al Capone in Alcatraz for tax evasion.
Sorry, Just Me, I have to take credit for “Stack-o-lies” moniker, although Mark did set it to the tune of “Stackolee”, which I like very much!
@Bubblebustin…
Well, then credit where credit is due. 🙂 I am not keeping up these days with all the comments, so I probably missed it. Well deserved moniker !!
I had assumed bubblebustin’ had known the Connection to ol’ StackerLie, who shoots a man for stealing his hat—just like his OVDI plan.
Not necessarily all FATCA related, but I’ve just had three disturbing interactions with financial services providers in the last week or so.
I received a letter from PostFinance in Switzerland telling me that I must waive any and all rights so that they could report my account information to Switzerland who would then report it to the UK. This is for a CHF convenience account where I would be lucky if the interest on the account amounted to a couple of CHF per annum. I was given less than two weeks to comply or my account would be closed.
Another bank notified me that they would no longer be able to clear USD cheques because HSBC and JPMorgan, who provided this service to the bank, were no longer willing to offer this service to any client. It’s unclear whether “clients” refers to 3rd party clients or whether it would also refer to overseas customers of HSBC and JPM. What I find remarkable is that this has to be a pretty lucrative service since the one time I used it, the cheque took 5 weeks to arrive in my overseas account after it was withdrawn from my US account. So, HSBC and JPMorgan are giving up on a free 5 week float because it is either too costly or too risky (or both) to continue that service. I suspect the reason why is because the USG gathers more information from a wire transfer than from a cheque. I spent nearly an hour trying to complete a wire transfer from the US to another account. They wanted to know who the beneficial owner of the intended account was, the purpose of the transfer, the source of the funds (even though they had been on deposit with that bank for nearly 20 years) etc. etc.
Finally, I spoke to a UK investment account provider today with whom I opened an account a matter of months ago. After it took them 30 mins trying to answer a basic question, I was told that they needed to re-certify the account opening information. The first question was “what is your nationality?” Since this question was not part of the account opening documentation, it prompted deep suspicion on my part. I was able to establish that answering the questions was entirely voluntary (though they didn’t offer to tell me it was voluntary and, indeed, “re-certifying” account opening details on a 3 month old account makes it sound like a mandatory procedure). They also asked me to re-certify my address (depite having given it as part of the process for the agent to get access to my account) and then wanted to also ask me where I was resident. This, by the way, is on an account that is nowhere near the limit for a FATCA reportable account and for a provider who does not discriminate against US citizens (which I am not). I honestly think the questions were prompted by my accent.
LOL, never saw the connection until you made it!
@Edelweiss
You know, I think we are going to hear more and more about these types of difficulties especially as the EU countries try to mimic or “improve” on FATCA like automatic exchanges between themselves.
So far, I have not had any problems. I just transferred some money from NZ back to my Wells Fargo account. No questions asked. Just provided the SWIFT number and my account number for WF, and for a relatively minor fee $25, the money was in the account in the States in less than 24 hours. I was expected it to take 3 days like Etrade and Vanguard did to send money to my bank account. Now, I have not tried sending money from the States to NZ, and that might be a different story…
@Just Me
I think of the US, in many ways, as a venus fly trap. I suspect getting money into the US is not a problem. Getting money out, well, that may be another matter.
I’m researching sharia banking and restructuring my mattress. If keeping my “money” (it’s all an illusion anyway) is such a pain for my bank then I’ll find a way to take the pain away.
Robert Wood’s latest…
FATCA’s Bleak Choices For Accounts, Income, Disclosure
The original target of the initiative was clearly not law-abiding U.S. citizens abroad. Yet they have their own worries now too. The State Department estimates there are 7.2 million U.S. citizens abroad. It seems safe to assume that most have non-U.S. bank accounts. The fact that only 825,000 FBARs were filed for 2012 suggests that this group too is under-complying.
Expat or not, for many U.S. persons with foreign income and accounts, it’s clear that compliance is required and well-advised. But a primary fear is precisely how to begin in a way that is least expensive and least risky. Here’s a refresher:
@Just Me
I’m disappointed in Robert. He didn’t mention how many Americans will just tell the US to stuff it.
Your comment was fantastic, and a great response to his almost clinical attitude toward the effects FATCA and citizenship based taxation will have on US persons. Thank you.
@bubblebustin…
I was not so hard on Robert, as I didn’t really expect that he would try to point out the consequences of FATCA in this article. That is our job! So, thought I would! Besides, as you know, those that are giving up their citizenship are, according to Robert Stack, “mythical creatures”. FATCA has absolutely nothing to do with it. Just a phase of the moon inspired the increase in renunciations, nothing else!
Robert and I are having a conversation, you may want to weigh in again.