Liberty and justice for all United States persons abroad

The Isaac Brock Society

1,012 thoughts on “FATCA Discussion Thread (Ask your questions) Part One”

  1. IRS FATCA News and Information bulletin released today:

    Draft W-8IMY, Certificate of Foreign Intermediary, Foreign Flow-Through Entity, or Certain U.S. Branches for United States Tax Withholding

  3. Regarding form W-8IMY:
    http://www.bna.com/form-certify-fatca-n12884911179/

    “It is going to be very complicated to prepare,” Candace Ewell, a director in the Washington National Tax practice of PricewaterhouseCoopers LLP, tells BNA. Noting that the form has gone from two pages to eight pages, Ewell predicts that in many cases, “this form is not going to be prepared properly.”

    I wonder if only US persons accounts are going to bear the cost of reporting for FFIs, or if they are going to share it accross all their customers. Like it’s already happening, it seems the most logical response from FFIs is to create special branches/entities for US-persons with higher account maintenance fees.

  4. Well, this one is getting into the weeds, but ….

    The International Swaps and Derivatives Association has issued FATCA protocols

    The impact of the Protocol is to place the FATCA withholding tax burden on the recipient of the payment by eliminating this tax from the definition of “Indemnifiable Tax” in the ISDA Master Agreement. The rationale is that the recipient is the sole party that has the ability to avoid the withholding tax by complying with the FATCA rules; therefore, the recipient should be the party burdened with the FATCA withholding tax if it chooses to not comply. 

    Let the disputes begin!

  5. *To provide non US person documentation in FATCA, is it necessary to fill in a W-8BEN even if there is no source U.S. income. If yes, what is the purpose then of the W-8BEN?

  6. @SeekingCLN

    As I understand things, it is only necessary to fill in a W-8BEN, if you are a non U.S.person and receive U.S. source income. If you are a U.S.person, receiving U.S. source income, you would instead fill in a W-9.

  7. From the Wall Street JournalLawyers, Consultants, Software Maker Team up on FATCA ComplianceCreating a new FCC  FATCA Compliance Complex!   Soon to rival the Military Industrial Complex!

    A set of far-reaching U.S. tax regulations has prompted cross-sector collaboration between a law firm, a consulting firm and a software maker looking to capitalize on financial institutions’ rush to comply with the new regulations.

    Law firm DLA Piper, software maker Pegasystems Inc. and consulting firm Capgemini announced this week that they were offering a joint product to help foreign financial institutions comply with the Foreign Account Tax Compliance Act, which comes into force in 2014.

  10. bubblebustin –  Tsk tsk. Well down in that Watner article. “All this is reminiscent of what … [[!*CENSORED*!]] … You sneaky little troublemaker.  (-:

  12. It’d be even more cheeky to make a full post featuring the Watner article. But remember you may not use the G word, the H word, the N word or the F word (and I don’t mean the four lettered one).

  13. Oh, Great!  Now the UK wants to copy FATCA.  Contagion has broken out, and no stopping the FATCA Fanatics and the OECD now, as more and more countries follow the good ole leader, U.S of A.  

    UK Legislators want their version of U.S. Tax disclosure laws

    http://reut.rs/O64I7h  

     Will citizenship taxation follow?  Might has well mimic all the bad practices of the U.S. 

  14. @just me

    I saw that too…it looks like the UK legislature wants to be the antithesis of a think tank also.

  15. A couple more recent links:

    Some UK-based ‘platforms’ that will and won’t accept US-taxpayer business post-FATCA:

    http://www.moneymarketing.co.uk/regulation/three-platforms-to-accept-us-taxpayer-business-post-fatca/1056625.article

    ‘The Peterson Institute’s Mr Hufbauer has called on Congress to delay the implementation of Fatca for five years. ‘During that time, the Treasury Department should be instructed to negotiate cooperative, two-way, reporting agreements…Then after five years, the Treasury ‘should dispassionately evaluate’ the reporting burdens and the additional revenue raised. At that point, a sensible decision can be made on whether Fatca should be allowed to take effect, Mr Hufbauer concluded in his report.’

    http://globalparadigms.blogspot.ca/2011/08/whats-wrong-with-us-fatca-tax-law.html 

  16. Note- re-posted from another thread

    Does anyone know if Canadian RRSPs will be added to other accounts at a financial institution for the purposes of determining the aggregate amount at the financial institution? I seem to recall that they may be an exception in FATCA for some retirement accounts, but I’m not sure the the type of retirement account had to almost exactly duplicate US type retirement accounts. 

  19. Clint…

    If you are still reading, in a word, YES…  It is part of the aggregate, or at least that is my read.  

    RRSP currently does not have an exemption from reporting and is considered a pension fund for FATCA…  Or at least that is my read of it.  So, if you have an extension until Oct 15th for filing tax and FATCA form 8938, I would include it rather than wait in the hope it will be excluded. 

    FATCA detailed explanation source is in Hale Sheppards work here. 

  20. In Switzerland there are generally two types of pensions:

    “Pillar II”: companies are required to offer employees a pension plan. Both the employer and employee pay into it. The funds are held in a trust either controlled by the company or an insurance or pension company.

    “Pillar III”: this is a self-directed pension plan offered by banks and insurance companies. It is similar to a US IRA.

    For FBAR purposes, a rule-of-thumb is to declare any pension funds controlled by the taxpayer (individual Pillar III pension accounts) and not to declare pension funds not controlled by the taxpayer (company-sponsored Pillar II pension accounts). An opposing opinion holds that Pillar II and Pillar III should be declared to be “safe”.

  24. *Any ideas on how fast FATCA compliance might come into effect by Taiwan banks?  Just wondering if an expat immediately closed a bank account with over US$10,000 NOW if that acct would still be reported when FATCA went into effect, esp. if that happened to be this calendar year, 2012. 

     

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