Story just appeared in the National Post:
“Canada will consider the embassy’s request for renewal of his accreditation once it has received written confirmation that Eritrea has complied in full with the department’s expectations … and therefore the consulate has effectively ceased to collect the 2% ‘recovery and rehabilitation’ tax and the donation for national defence,” read the note, a copy of which the National Post obtained.
“If Mr. O. Micael continues to carry out tax solicitation and tax collection activities in spite of Canada’s express disapproval and view that such activities are incompatible with the normal performance of consular functions, it will expect a notification from the Ministry stating that such person has been recalled from Canada.”
Note to US Senators if you go ahead with Passport “revocation” bill you will essentially be forcing US Consular Personal in Canada to do the EXACT same thing Eritrean officials were almost booted out of the country over. I do have to say it interesting the Canada took such strong steps against Eritrea especially compared to the US and the FATCA G5 countries notwithstanding the resolution of the UN Security Council. A principled Canadian foreign policy perhaps.
Wow. I wish I were Eritrean.
@Tim,
Thanks for reporting this encouraging event. Will this strong action
toward Eritrean’s citizenship-based taxation to help fund that
country’s military have bearing on the citizenship-based taxation of the
US, which in part pays for US military? Although the US and Canada are
allies, will the two countries’ citizenship taxation be dealt with
differently?
*The next question of course is when is Canada going to threaten to expel US diplomats if the US does not suspend the collection of US taxes from persons who hold US citizenship who live in Canada?
What is sauce for the goose should be sauce for the gander. So why shoult Canada make such an issue of this with Eritrea, but allow it to stand without a peep when practiced by the IRS? I am pretty sure that far more money flows out of Canada directly to the US Treasury than ever flowed to the Treasury of Eritrea.
In my opinion it is gong to have to be action like this in order to break the back of the extraterritorial taxation levied b the US Government on its expatriates living and working abroad. Nothing short of this will ever wake up the US Congress with respect to how US citizenship based taxation violates the territorial sovereignty of Canada and other nations.
*@Everyone
In AUS I heard on the radio that the treasurer of AUS Wayne Swan commented that “cranks and crazies” have taken over the US Republican Party and pose a threat
to the “world’s biggest economy”. The Prime Minister Julia Gillard of AUS defended the comment and expressed concern about the global economy if the Republican party gets into power.
It makes me wonder how much the AUS Government knows about FATCA, the cost to the planet and the affect it will have on the world economy!
It seems to me that the world will just whatever the US wants and do not care about its citizens. Trading with the US seems to be so important that it will through the citizens under the bus to trade with the US.
I hope I am wrong – what do everyone else think?
I think the difference here is the 2% recovery tax. The United States does not collect or demand this from there citizens therefore it is sort of like apples and oranges..… “and therefore the consulate has effectively ceased to collect the 2% ‘recovery and rehabilitation’ tax and the donation for national defence,” .
Although i do not agree with citizen based taxation, i doubt this will have a dent i the news media on the US expats.
US is trying to get some “fresh meat”.
http://www.boasnoticias.pt/noticias_EUA-v%C3%A3o-sortear-cerca-de-50-mil-vistos-de-resid%C3%AAncia_12659.html
English summary:
They are trying to get immigrants from countries that have sent LESS than 50,000 people in the last 5 years to the US. In this case, countries like Portugal or Ireland. If these would be immigrants have little money, this may be good for them; however, I seriously doubt that anyone is going to mention the FBAR requirements to them if they have plenty of assets. The US is a wolf in sheep’s clothing.
I saw yesterday that US Residents are now required to pay for health insurance or pay an extra tax, and premiums haven’t dropped. On the contrary, people are complaining that premiums keep going up. If Obama wanted people to be insured, why didn’t he pay for it?
*@geeez, you ask why Obama did not pay for the insurance? The short answer is he does not have the money. The US Treasury currently has a $16 trillion debt. I think I am correct,but as I recall the US has to borrow 47 cents out of every dollar that it spends. The US spoends far more than it takes in. The Democrats insist that it is necessary to increase the taxation of the incomes of the top 5%, but if they were taxed at 100% this would not even make a dent you could measure on the overspending.
The US needs drastically to reduce its spending. The no. 1 source of mfunds borrowed by the US today is the Chinese Government. One way it could ge nerate more tax revenues would be to increase exports. The current 12-moth US trade deficit is $750 billion and it grows by $2 billion per day.
For comarison purposes Canada’s 12- month trade balance shows a surplus of US$3.3 Billion. Germany’s trade surplus is currently $230.3 billion, which is well above China’s $175.1 billion.
What we see in these trade balance figures is the fruit of a tax policy which fiscally punishes US citizens who relocate abroad to create tax revenus and employment back home by capturing export markets. As they used to say figures don’t lie but liars figure.
Congratulations, Canada. Although this stops the collection of the diaspora tax in Canada, the Eritrean government can still force its citizens to pay the tax if they travel to Eritrea. However, I think that if more countries where Eritreans live abroad prohibit the collection of the tax there, Eritrea may realize that it can no longer enforce the tax effectively and it may abolish it for good. If that happens, the US will really be the only country in the world with citizenship-based taxation.
The fact that the United States IRS branch has given me $3300 bill, not allowing my Foreign Earned Income Exemption, seems to have been retaliation for having renounced my citizenship. See my letter that I sent in with my 2009 taxes. At this point they have refused to accept the three times that I’ve sent amended forms 2555. Good luck collecting it.
The violation of our basic human rights is intolerable. I think I would have a good case for suing the United States in a Canadian court.
Meanwhile, the FATCA monster swallows more countries…
http://www.tax-news.com/news/US_Sends_FATCA_Envoy_To_EU_Asia____57413.html
@Petros: The fact that the United States IRS branch has given me $3300 bill … seems to have been retaliation for having renounced my citizenship.
Correlation is not causation. Far, far more likely is that they simply haven’t put the separate pieces of your return into their single cohesive whole yet, and though it might take some prodding from you it will sort itself out in the end. The IRS is sclerotic and short-sighted (“myopic”, according to Doug Shulman!). That makes it frustrating to deal with, but the flip side is that it’s too inflexible to “punish” somebody for renouncing. IRS internal processes just aren’t that malleable.
Just curious if anyone can see how the comments are running on this article. I have clicked it several times, and nothing comes up? Anyone else having that issue, or are they just NO comments?
@just me
I had that problem last week. They were in my spam folder, but yours sounds different.
@ShadowRaider
That would make it so much easier for us by saying that the US is the only country on the planet that taxes its citizens while residing abroad, although it has been advantageous to put it in the same category as a beast like Eritrea.
@Watcher, The IRS could have figured it out by now. They are dumb, dumb, dumb, and acting in a manner that is strictly a violation of the rights of an ex-citizen–or perhaps they don’t care because now that I’m not a citizen anymore, I don’t have any rights.
*bubblebustin, Sadly, that won’t change anything. The US government has a lot of experience in doing things against the interests of the world, and most US politicians don’t care about the world either. Furthermore, the only time that we matter to them is when we get murdered due to US policy or when they are convinced that they can get some money out of us.
@SwissPinoy
Churchill: ‘We can always count on the Americans to do the right thing, after they have exhausted all of the other possibilities’. Funny, I thought of Churchill as more of a pragmatist than that 😉
@Petros
This is why I’ve not been so hot to renounce until we get our issues behind us, as with the loss of responsibilities comes the loss of rights as a US citizen. I’m going to trust my lawyers many years of experience that it would be’ like waving a red flag’. That being said, a big devaluation in the USD and a increase in expat-punishing legislation also puts us at risk.
@Bubblebustin, Mona Lisa: What is happening to me is not a reason not to be free of this tyranny. Relinquish, be done with them. They can try and chase me down, but Canada will not collect their tax bill and I am too old for military service.
Remember this, being an expat is nearly as bad as an expatriate. You folks are expats and thus worthy of ill-treatment. In their eyes, you left the United States for no good reason except to avoid paying taxes.
@Petros
Good point.
And how does the US protect the rights of the non-US spouses when we hand over bank or any information on them to the US government?
*
@Petros,
You have only gotten 3 IRS notices so far. It takes 4 or 5 notices from them, a phone call, and a new calendar purchase before you will get a result.
I had the same problem with Norway. 20 phone calls and letters and emails didn’t matter. Only after I purchased and began using a new calendar did a solution letter land in the mail.
I am still waiting for an 1116 error to be cleared after 10 months and 4 or 7 IRS bills.
In either case, the amounts that are involved are bank breaking.
@Petro, @bubblebustin, and @all, by now, doesn’t the US already assume that all those renouncing/relinquishing are already doing it for tax reasons, just by default? And, other than being able to visit the US, what are those rights we have as US citizens that we don’t enjoy if we weren’t? I’m confused about what specific ‘rights’ we are supposed to be able to ‘enjoy’ from the IRS, that theoretically don’t exist after renouncing? I thought the IRS reserved the right to force previous ‘taxable persons’ to comply until the IRS decides it is satisfied – whether they were previously citizens, or green card holders, or those with substantial presence.
@badger
This is pure speculation on my part, but my thought is that once a US citizen has renounced, should a problem arise during the compliance procedure, he/she would not be treated the same as a US citizen and would not be afforded the same protections given to those with US citizenship.
@bubblebustin; I’ve just never been clear on what those protections might actually be, re a citizen vs. a non-citizen.
*badger, I once read on an IRS page that taxes were considered by congress as being the main reasons for renunciations. Unfortunately, I can’t seem to find that link anymore.
*@bubblebustin, you are correct, I believe, in your assumptions. But carrying a foreign passport you have the right to contact a consular official of the country whose passport you are now using in case US authorities treat you unfairly. That you cannot do if you have dual or only US citizenship