Liberty and justice for all United States persons abroad

Arthur Cockfield on FATCA

Arthur Cockfield on FATCA

Professor Arthur Cockfield will be at McGill next Monday, where he will present his paper on FATCA as part of the Tax Policy Colloquium Series.

The Limits of the International Tax Regime as a Commitment Projector

The paper examines how transaction cost approaches (as developed by North and Williamson) can inform international tax law and policy discussions. The international tax regime evolved institutions and institutional arrangements to address transaction costs such as the risk that two countries might doubly tax the same cross-border business profits. It mainly sought to reduce this risk by serving as a ‘commitment projector’ that enables governments to make credible political promises to taxpayers, other members of the public and other governments that they will not overtax these cross-border profits. As a result of these political commitments, taxpayers do not need to incur transaction costs they would otherwise have to sustain to identify and protect their global tax liabilities. In other areas, however, the international tax regime does not facilitate credible commitments. The talk will focus on one such challenge to the regime, namely the 2010 U.S. proposal to create a global tax reporting system via the Foreign Account Tax Compliance Act or FATCA. By eschewing traditional bilateral and multilateral cooperation when it introduced FATCA, the United States subverted its ability to offer credible commitments and raised transaction costs for economic participants. The talk will review the impact of FATCA on U.S. expatriates (and others) in Canada as well as potential options available to the Canadian government to resist FATCA.

11:35am at the McGill Law Faculty, Chancellor Day Hall Room 202, 3644 Peel Street

7 thoughts on “Arthur Cockfield on FATCA

  1. South China Morning Post: “Tax bills prompt Chinese to ditch US passports”

    From the article:

    “For many wealthy mainland Chinese who immigrated to the US, an American passport is a genie that cannot be put back in the bottle. More and more of them are thinking about renouncing their US citizenship, something that would have been almost unimaginable a decade ago, when getting a US passport was the ultimate status symbol in China.”

    http://www.scmp.com/news/china/article/1060557/tax-bills-prompt-chinese-ditch-us-passports

  2. @AbusedExpat

    Good article. For renouncing:

    “There is also the fee for legal advice, which runs up to US$30,000 at Deng’s firm.” 

    That seems pretty steep for legal advice. Perhaps that includes the required 5 years of tax filing. 

  3. @AbusedExpat

    I see that there aren’t too many comments on this article, and some mistaken information.  I should post one, but too tired tonight.  However, if I think of it in the morning, I will.  Thanks for finding this story…  I think this is going to become a common refrain we hear more and more.

    “I regret it to death, all of my friends regret it to death,” said Wu about taking out US citizenship. “I’m never going back.”

  4. *Here’s the latest from today:

    Financial Centres Shy from FATCA Spotlight
    http://www.iexpats.com/2012/10/financial-centres-shy-from-fatca-spotlight/

    From outside the US, bigger countries with a well-developed economic
    infrastructure can deal with the increased reporting burdens…

    The trouble comes for less mature banking economies like Panama and the Bahamas.

    They don’t have the infrastructure to cope with FATCA. The Bahamas
    has no tax authority because the government does not levy income tax,
    Panama has little incentive to swop tax data as income earned abroad is
    exempt from tax…

  5. posted this on the FATCA thread, but thought a copy here would be good as well:
    found this on the Privacy Commissioner’s site:
    http://www.priv.gc.ca/resource/cp/2013-2014/cp_bg_e.asp

    Project Backgrounders
    Contributions Program 2013-2014
    Organization: Queen’s University, Faculty of Law
    Location: Ontario
    Funding Amount: $10,000
    Project Title: The Privacy Implications of the Foreign Account Tax Compliance Act (FATCA)
    Project Leader: Arthur Cockfield
    Project Description: The project will review the privacy implications of the U.S. Foreign Account Tax Compliance Act (FATCA) in light of Canada’s Personal Information Protection and Electronic Documents Act. Specifically, the project will review implications on Canadian privacy rights and interests of any new agreement negotiated between Canada and the United States to implement FATCA. The project will also examine the interplay of FATCA with other Canadian laws that protect taxpayer privacy such as the Income Tax Act, the Canada-United States Tax Convention Act and the North American Free Trade Agreement (NAFTA). Finally, the project will review how Canadian banks are trying to comply with all relevant laws, and whether these banks are adopting new information technology systems to help them identify, sort, and transfer financial information to U.S. tax authorities.”

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