Liberty and justice for all United States persons abroad

The Isaac Brock Society

Australia and FATCA

Posted on by Posted in Issues regarding US persons abroad 23 Comments

From the Government of Australia Treasury:

The Foreign Account Tax Compliance Act (FATCA) was enacted by the United States Congress in March 2010. It is intended to assist US efforts to improve compliance with US tax laws and will impose certain due diligence and reporting obligations on foreign (non-US) financial institutions.

In response to concerns about the impact of these obligations on Australian financial institutions and the Australian economy as a whole, the Australian Government is exploring the feasibility of an intergovernmental agreement with the US. The objective of such an agreement would be to minimise compliance costs for Australian stakeholders while enhancing the existing tax cooperation arrangements between Australia and the US.

Source: Intergovernmental agreement to implement FATCA

 

23 thoughts on “Australia and FATCA”

  1. Sometimes I really wonder if any of these countries seeking an intergovernmental agreement ever tell the US to come to their senses and do away with citizenship based taxation. This way the foreign govts. would probably have a lot less reporting to do, and on top of it US citizens abroad wouldn’t have such a hard time with their local banks. It would be interesting to hear what actually goes on behind closed doors.

  2. *A personal thought on this: Canada remains the outstanding exception to countries negotiating bilateral agreements for sharing information with the IRS. You can be sure that the Canadian banks and other financial organisations as well as their trade and professional associations are lobbying intensely for similar arrangements leading up to January 2013. There is not, of course, an organisation representing the diverse million or so “US persons” in Canada. Are we going to be blind-sided?

  3. @Northern Shrike

    ‘Canada remains the outstanding exception to countries negotiating bilateral agreements’

    The silence out of Flaherty and Ottawa has been so deafening, we don’t know whether Canada is negotiating or not.

    As Tim said on another blog, the present Conservative government in Ottawa, could decide to ‘pass the buck’ and let the CBA make the decision. They do have a history of ‘offloading’ contentious issues.

    One thought that I had was that so many of us were writing letter to MPs, Minister of Finance, NDP, Privacy Commissioner etc. That was many months ago. Although our answers to the letters were mostly vague, we did get answers. Now we have nothing but silence out of Ottawa. Perhaps it is time to step up letter writing campaigns.

  4. Two days ago I received an email from my MP John Weston’s office asking me to resend them the copy I made of my submission to the Canadian Government Finance Committee regarding the 2013 budget, as the original I sent to Weston’s office did not transmit. As mentioned here,

     https://isaacbrocksociety.ca/2012/07/20/more-correspondence-from-the-office-of-john-weston-mp-irs-is-a-budget-issue-for-the-government-of-canada-get-your-voice-heard-before-the-deadline-for-2013s-budget-submissions/

    John’s office wrote: ‘Should you proceed, John would back you up with a submission to the Minister of Finance in the Fall.’

    I could assume that Mr Weston is currently preparing a submission in ‘back up’ of mine. In mine, I suggested (among other things) that the Canadian government allocate funds to determine what a FATCA intergovernmental agreement will cost Canadian taxpayers before entering into such an agreement. In this respect, I don’t see opening a dialogue on the possibility of an intergovernmental agreement as necessarily a sign of surrender to FATCA, but as perhaps a means by which to encourage greater scrutiny of it. As one Canadian investment manager said regarding FATCA, ‘this is not a war we can wage on our own’, which I took to mean that from the FFI’s perspective it must be resolved politically. I believe that the Canadian government is diligently working on this, although it’s hard to find any evidence of this. Don’t be surprised if the Canadian government makes a similar announcement to Australia’s ‘exploring the feasibility’ of an IGA. Sometimes you have to shine a light on the monster in order to slay it.

  5. @bubblebustin,

    Applause for your taking the tiger by the tail. Thanks so much for your submission to Canadian Government Finance Committee regarding the 2013 Budget and your communications with your MP, John Weston.

    And, that’s the kind of response and work for us that we should expect from our government representatives.

    Good work, bubblebustin!

  6. I’d be very surprised if it hadn’t crossed many minds in Ottawa that the American eagerness to make a deal on FATCA wasn’t the key to some serious trade concessions on the American side, most obviously on softwood lumber. I suspect that this is the way things will develop.

    If I had anything to do with cross-border trade at DFAIT I’d see FATCA as a really valuable opportunity that should be ruthlessly exploited.

    It will also have occurred to them that post-November may be the best time to deal with this, both because the concessions might go over with less electoral pain on the US side and because they won’t want to waste time dealing with a lame-duck administration, if things turn out that way.

    Schubert?

  7. @Calgary411

    Thank you. Sometimes with all the negativity I feel I’m being ‘Pollyanna-ish’ in thinking that our government will stand up to the US, but what other means is there by which we can fight this other than political? Imagine what would happen in Canada if our government asked Canadians what they thought about an IGA with the US on FATCA! They would be inundated by ALL Canadians, including those who would protest against the Harper government for once again threatening the sovereignty of Canada by even considering such a thing. I can’t wait for this bombshell to hit, really (figuratively speaking).

    @broken man 

    I saw on the news today that Harper stopped in BC on the way to the APEC leaders summit in Russia. He mentioned that Canada needs to develop more trade with Asia, and that we cannot continue to rely on traditional markets anymore, mentioning the US specifically. He seems determined that Canada do whatever it takes to push our goods to Asia as the US is weakening. 

  8. Northern Shrike etc –   Good to see others piling on the doubts about Canada’s government in power ever doing anything for its hundreds of thousands of U.S. extraterritorials – other than reading the existing treaty out loud. Yesterday I spotted this recent dark speculation on the future.

  9. *@everyone

    I spoke to the AUS treasury and they said nothing was set in stone. They encouraged written submisions to explain our case. I hope people write in as this could help to minimise the damage of FATCA.

    I spoke to local PM and he did not even know about FATCA. He did not believe me when I explained citizenship based taxation. He simply did not understand the issue!

  10. Good information, upset, and another illustration of how can anyone believe when we try to get the story across? It all is so unbelievable, not easily understood.

  11. I like to use word ‘incomprehensible’. This is encouraging, as the press alludes to it being done deal for Australia. 

  12. *@everyone

    The MP thought I was a conspiracy theorist – that is: it was so unbelivable that how could this be true.

    AUS Treasury understood much more but they still wanted submissions to state our case. 

    If FATCA comes in what is to happen to us? Will we lose our life saving for not filing a form? Will we be protected from our governments?  

  14. *Canada like Australia does have procedures to ask for public comment before starting treaty negotiations. Here is a link below to a typical RFQ in fact for the Australia Canada Tax Treaty.

    http://www.fin.gc.ca/treaties-conventions/notices/australia-australie-eng.asp

     

    So the fact that no public announcement has been made in Canada is not necessarily a bad sign it is simply an indication that the Canadian govt has not wanted to go to the point yet that Australia has gone to.

     

  15. @Tim 

    I think we can reassign the Canadian government’s silence from being “deafening” to “pregnant” now. The suspense is killing me.

  16. From Australian Brocker, Jak:

    Calling those Brock readers from Australia:

    Kim Beazley, American Ambassador for Australia in America; his email Kim.Beazley@dfat.gov.au
    LET him know re: Australian Superannuation.

    Dear Jak,

    Thanks for the note. I will make some enquiries of the Australian Government about what they’re up to. Certainly I haven’t been tasked with anything on this to this point but it looks like a useful thing to check up.

    Best wishes
    Kim
    Kim Beazley

    In response to correspondence:

    re: Australian Superannuation.

    Please respond regarding getting a SPEEDY US/AUST tax treaty that will address MANDATORY Australian Superannuation (as the treaty has not addressed this issue since Super was put in force in the early 90’s)

    This is negatively affecting Australian Citizens in the US AND Dual AU/US citizens in Australia.

    It seems if the US 2006 Tax treaty model is discussed at a SPEEDY meeting that Super will only be taxed in country it is earned and America will recognize the Super as exempt to their tax.

    Some helpful emails
    Greg.Wood@treasury.gov.au TAX Treaty Australia,
    rosy.l.lor@irscounsel.treas.gov TAX counsel IRS,
    Henry.Louie@treasury.gov Tax Treaty USA,
    NielsMarquardt@amcham.com.au — ex Ambassador US Chamber of Commerce Sydney

  17. To Australian Brockers and any others around the world (from JakDac):

    From around the globe please email Kim Beazley, Ambassador to US from Australia. Fill him in on the worries we have and thank him for his concern. (his email Kim.Beazley@dfat.gov.au):

    Kim.Beazley to JakDac,

    Thanks for raising this issue with me.

    As flagged in my earlier email, I have made some enquiries within the Australian Government and can confirm that we are aware of the problem you outline (which stems from a mismatch between the Australian and US taxation treatment of Australian individuals’ superannuation entitlements). You are also correct that a solution will require renegotiation of the Australia/US tax treaty to specifically address the problem (by inserting provisions similar to those in more recent tax treaties that the US has with some other countries).

    In July last year the Australian Treasury invited public submissions on the countries with which Australia should seek to negotiate new or updated tax treaties, as well as the key outcomes Australia should seek in such negotiations. This issue was raised by a number of stakeholders. The Government has noted it and will seek to address it when the Australia/US tax treaty is next reviewed.

    That said, tax treaties are generally not renegotiated on a single issue basis and often take considerable time to negotiate because of the need to work through all the issues of importance to both countries. In addition to the renegotiation process itself, changes to tax treaties require legislative change. This also adds time to the process and makes it subject to other legislative priorities.

    Best Wishes
    Kim

    to Jak’s:

    ___________________________________

    Any way we the affected can help expedite a solution?

    Honestly the current situation has effected many people by negatively affecting marriages, financial positions, and health.

    You did not let us down I thank you for your involvement and pray for a solution.

  18. Email and ask Rand Paul to change treaty it NOW

    Carolyn_Moffa@paul.senate.gov Office of Senator Rand Paul

    Thank you for your correspondence to Senator Paul’s office regarding the US-Australia Tax Treaty and the affect it will have on Americans Abroad. Rest assured, as tax treaties are considered in United States Senate, we will be sure to keep your views in mind.

    Sincerely,
    Carolyn

    —
    Carolyn Moffa
    Legislative Aide
    Office of Senator Rand Paul

  20. For all Americans and Canadians (everybody) overseas that want to call Senators or relatives for free by telephone on Android phones get GrooveIP lite at play store Gives you a local US tel # and lets you make calls to the US and Canada free

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