http://www.bissresearch.com/blog/fatca-the-end-of-the-beginning/105
FATCA is still with us. Looming over financial services like a great big Golden Eagle, it has been gliding on the hot air of dissension for a few years, but make no mistake the FATCA bird is going to swoop down soon.
Like all regulations which cause industry wide change, FATCA has been taking hits from various jurisdictions around the world, which is the normal response from the finance industry when it comes up against the requirement to invest in technology developments that do not have an obvious business benefit. The tactic is always to rebound back to the inflicting authorities with a myriad of reasons why the laws and rules cannot be implemented, in the hope and expectation that the authorities do not know enough about the market mechanisms or technology to know any different. This has certainly been the case with many regulations that the rest of the developed world has been forced to adhere too. Implementing a global regulation is always a tough call, but in the current economic environment one that had very little chance of being waved through unopposed.
However, the issues that the financial world has with FATCA should not dull the appetite for this regulatory requirement not to be enforced by the revenue authorities across all markets. Indeed the UK has been adopting FACTA like positions already and a UK version of FATCA will no doubt emerge sooner or later. Quite right too in my opinion.
In fact all financial markets worldwide should be made to comply with FATCA, as a kind of test model for a similar requirement to be introduced by their own revenue authority. It is in this way that a global net can be created enabling tax avoidance by the rich and criminal to be eradicated. It’s a small price to pay for financial services firms to buy into the FATCA type projects, which should be viewed as an international development not simply by the will of the USA.
I find it hard to understand the resentment that FATCA has engendered, when in truth it’s a vital piece of tax management that only jeopardises the criminal. The financial markets have to ensure that they are seen as strong and resilient by working with government tax authorities for the good of all.
Isn’t this a good PR job for the financial services industry to undertake for the benefit of society?
Sigh…. This sounds like Max Baucus speaking….
“It is in this way that a global net can be created enabling tax avoidance by the rich and criminal to be eradicated”
As Max said, FATCA will root out tax cheats once and for all
If you are an ideologue who believes this with your whole heart, are incapable of understand opposition or unintended consequences and collateral damage, it is hard to have a legitimate debate or disagree. They see no irony that the only way this happens is by stealth and without wide spread public debate and awareness before a vote is taken.
“Just “Bend Over” and take it. This GATCA suppository is good for you. Trust us. We have been right on the War on Drugs, the War on Poverty, the War on Terrorism, and every other war we have ever started and failed. We know best, setting aside our past abysmal performance, and so just smile and take it. We have a new product to sell you!”
re; …”…all financial markets worldwide should be made to comply with FATCA, as a kind of test model for a similar requirement to be introduced by their own revenue authority. …”
Except that the rest of the world does not practice extraterritorial CBT.
Does no-one else get it that the US tax system – and taxing people based on parentage, accidental birthplace, and expired resident status is in conflict with the primarily residence based system of everyone else?
Not to mention that the US will never provide full ‘reciprocity’ in automatic reporting, or abide by any treaty without the ability to unilaterally override it via US laws.
Who is going to make the US comply?
Sounds good in theory, but in practice it is the end of the expat. Maybe in a global environment, people don’t ever need to leave their country. Skype and video conferencing will do.
B.I.S.S Research has one too many “I” and “S”‘s in it.
The moment the USA goes to residency based taxation, I’ll agree with this article (at least somewhat). Before then, the USA is a fox in the hen house on this one.
The disingenuous nature of these types of obvious propaganda never fails to amaze me.
Why are financial institutions upset? Really?
Perhaps because they are being blackmailed by the USG into breaking laws in their own countries and by the fact that they know full well that this isn’t about catching tax cheats.
And so the bs’ing continues.
How about this scenario.. Because of FATCA no US citizen will be able to have a bank account outside the USA. The foreign banks will deny this to avoid the headaches. If there are megarich tax cheats, they simply marry a non-us citizen and funnel funds into their partners non-US account. At that point the funds vanish into an area the IRS has no legal ability to detect. Seems this would make it even harder to catch out cheats, so in the end maybe the IRS are shooting themselves in the foot? Or will FATCA somehow deem non-US citizens into US citizens if they marry a US citizen? Will my non-US wife be subject to FATCA because she’s married to an American? They may as well make this law as well, who would stop them?
Re: “If there are megarich tax cheats, they simply marry a non-us citizen and funnel funds into their partners non-US account”.
I am confused. These megarich tax cheats you refer to live in the USA I presume (cause we all know those of us OUTSIDE USA are victims not tax cheats). Where do they find these non-US citizens to marry? What if they already have a US citizen spouse?
Re: “Will my non-US wife be subject to FATCA because she’s married to an American?” She already is if her name is on any account with your name on it.
He is delusional. What foreign person is going to want to marry any U.S. person after hearing about FATCA and all the other impositions the U.S. will place upon them when they can easily marry someone else from any other nation in the world and not be swept up in the U.S.A. war on citizens abroad.
Not a very bright fellow, eh? If he’d spent five minutes researching the subject, he might have figured it out. But he’s probably a busy professional, taking advantage of the gift that just keeps on giving.
Here is another so called Tax Expert that qualifies….
FATCA deal is ‘good news’ for Isle of Man
Signing of a long-awaited automatic tax information exchange deal with the UK has been welcomed by an Isle of Man-based tax expert.
But the deal will mean a significant layer of extra administration for island financial services businesses who now need to be able pin down precisely what extra compliance costs are required.
That’s the view of Phillip Dearden, director of BDO (Isle of Man) who said he expected a similar FATCA deal with the US will follow shortly.
He said: ‘It is good news that the UK IGA is now signed.
‘Whilst very few businesses welcome extra levels of regulation, we have been aware for some time that it is coming and now need to pin down exactly what is required.
‘No-one can plan in detail until we see the local legislation and guidance that will apply on the island.
‘Hopefully, the completion of the UK intergovernmental agreement gets us a bit closer to that detailed information that businesses need in order to prepare themselves for the extra administration they will have to undertake.
‘I don’t think we are there yet as the IOM still has to complete an IGA with the US, I doubt the UK agreement would have been completed if the terms of the US agreement had not been determined so I suspect and hope that the second IGA will follow shortly.
‘We will then need detailed local legislation and I suspect Treasury will also issue guidance notes to assist businesses in understanding exactly what is required.’
The UK’s Chancellor of the Exchequer, George Osborne, last week hailed a ‘momentous step forward in tax transparency’ when the Isle of Man became the first British dependency to sign an agreement with the UK on automatic sharing of tax information.
Chief Minister Allan Bell described the signing of the deal as ‘world leading’ and said it would ‘once and for all’ rid us of the ‘outdated name of tax haven’.
Mr Dearden said the main aim of both UK and US FATCA is to provide information regarding income earned by US and UK resident taxpayers that they are not disclosing.
But he added: ‘I suspect there is very little business of this nature on the Isle of Man.
‘If I am right, the main effect of FATCA will be to produce a significant extra layer of administration for both financial services businesses and for the Isle of Man Treasury which will have to collate significant information for onward transmission to the UK and US tax administrations.’
Signing of the FATCA deal had won praise even from the sternest of tax haven critics.
Richard Murphy of the Tax Justice Network said: ‘These deals are not perfect. But they’re a major step forward.
‘Campaigning against tax havens has worked. But let’s be clear, we still have a long way to go. Including with the Isle of Man.’
Mr Murphy said the Isle of Man had secured a PR advantage by being the first to sign. But he added: ‘It is progress – and if we only ever refused to recognise that we’d get nowhere
‘I have massive criticisms left – of course – but son of FATCA is better than nothing.’
Speaking following a meeting of the IMF and G20 finance ministers in Washington last Friday. Mr Osborne said he hoped other jurisdictions would follow our lead as soon as possible.
He said: ‘The agreement we have now signed with the Isle of Man is a momentous step forward in tax transparency, showing that when we work together we can push the international agenda forward.’
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What is FATCA?
Late last year the Manx government announced it was negotiating with the US to implement its Foreign Account Tax Compliance Act and was committed to become the first nation to sign a FATCA-style deal with the UK.
Under these FATCA arrangements, automatic exchange will cover details of all account holders, including those whose identities might otherwise be hidden by trusts or companies.
It is likely to become a global standard and the UK Treasury said the net was closing in on those wanting to hide their money offshore.
We have automatically shared personal bank account information with EU member states since July 2011, being one of the first non-EU countries to do so.
Another candidate, out of Israel…
Aaron doesn’t think anyone should renounce, but rather just pay your “Fair Share” I take that to mean he is a BIG believer in Citizenship taxation.
http://www.marketwatch.com/story/retired-abroad-get-ready-for-fatca-2013-10-18?pagenumber=1