As Tim has previously reported here, New Zealand’s National Government (pseudo Republican Conservative lite equivalent) introduced Legislation to implement a FATCA IGA, the U.S. Democrat’s liberal ideological global agenda.
Strange bed-fellows and alliances are formed when the U.S. resorts to global extortion to impose its will!
The FATCA IGA round up of New Zealand continues in stealth like many other countries in the world.
This Bill has been met by resounding silence in the mainstream NZ media. They, like the USA, seem to have NO interest in taxation matters that might bother their distracted entertainment or sport consumed audience. Besides, Kiwis are used to auto tax deductions and reporting. What is one more?
The only NZ publication where I have noted this FATCA IGA story, is in Interest.co.nz . That only got 4 comments. There was also one blog that Badger discovered.
The first reading of this Omnibus Tax bill, the sneaky way parliamentary governments get a lot of revenue matters past without much notice or debate, is today.
Kiwi Osgood, a contributor to many good discussions like here and here, as written an email today to Labour Opposition Leader, David Cunliffe addressing his concerns and questions about this shameful legislation being introduced by Revenue Minister Todd McClay:
Dear Mr Cunliffe
I have written to you previously on the subject of the US Foreign Account Tax Compliance Act (FATCA) and it’s effect on New Zealand and it’s Citizens. This one page summary provides a brief overview.
Shamefully, our government is negotiating an Intergovernmental Agreement (IGA) with the United States to implement this extraterritorial law in New Zealand, at great cost to the New Zealand taxpayer and even greater cost to those New Zealand Citizens unfortunate enough to have a US “connection” (Born there, has a US parent or is/was a Green Card holder). Similar to the TPP agreement, this is being done in secret, without parliamentary oversight. The only consultation that has occurred is with New Zealand financial institutions, who have their own agenda and have lobbied strongly for this IGA.
FATCA cannot be implemented in New Zealand without breaching New Zealand Privacy and Human Rights laws, with or without an IGA. The bill that is scheduled to have its first reading on Tuesday 3rd December is a tax omnibus bill (No. 176-1) titled “Taxation (Annual Rates, Employee Allowances, and Remedial Matters) Bill“. Part 11B (Foreign account information-sharing agreements) contains the legislation that will force New Zealand financial institutions to comply with the (as yet unsigned) IGA with the United States.
The imposition of FATCA on New Zealand by the United States is a breach of New Zealand sovereignty and essentially turns the New Zealand IRD into an enforcement arm for the IRS. The harm to New Zealanders and the drain on the New Zealand Treasury will be measured in tens, if not hundreds of millions of dollars – for nothing in return other than the removal of the threat of sanctions against our financial institutions.
Some urgent questions need to be directed to Revenue Minister Todd McClay:
1. Why is legislation that will breach New Zealand Sovereignty and override our Privacy and Human Rights Acts being buried in a tax omnibus bill? FATCA requires that New Zealand financial institutions “hunt down” New Zealanders of a specific national origin (US) in order to violate their privacy and turn their private financial data over to a foreign government. Spouses, New Zealand charities and any other organisation that the “US Person” has an account with signing authority will also have their data reported. Why is legislation being introduced that relies upon the signing of an agreement with a foreign government that has been “negotiated” in secret?
2. Why is legislation that will breach New Zealand Sovereignty and override our Privacy and Human Rights Acts being buried in a tax omnibus bill? FATCA requires that New Zealand financial institutions “hunt down” New Zealanders of a specific national origin (US) in order to violate their privacy and turn their private financial data over to a foreign government. Spouses, New Zealand charities and any other organisation that the “US Person” has an account with signing authority will also have their data reported.Why is legislation being introduced that relies upon the signing of an agreement with a foreign government that has been “negotiated” in secret?
3. How can legislation be contemplated when a cost/benefit analysis has not been done. The accompanying Regulatory Impact Statement (RIS) (point 18), states that “Inland Revenue does not consider it is possible to estimate the fiscal costs/benefits of entering into an IGA with the United States?”
4. What consultation will be done concerning the contents of the proposed IGA? The RIS (point 25) states that “The content of any IGA agreed between officials of the United States and New Zealand will be subject to scrutiny in the appropriate manner”. What exactly does this mean? (Actually, we already know the content as it is offered by the United States on a “take it or leave it” basis – see point 25 of the Treasury “Budget 2013 Information Release”. Some negotiation.
5. What will be done to protect New Zealand Citizens from seizure of their legal, post tax paid, New Zealand assets by the United States after their data has been reported? Will New Zealand collect on behalf of the United States causing an increasing drain on New Zealand GDP?
There are many other deeply disturbing implications and consequences of this misguided law. Please stand up for all New Zealanders and hold the government accountable for its actions by asking the above questions BEFORE an agreement with the United States is signed.
A proud New Zealander (with an unwanted US connection)
These IGAs are bit like you wake up some morning and find Uncle Sam smiling next to you in bed and it dawns on you that you’ve just been f**ked.
Carving out ‘resident citizens’ is really the only strategy unless your jurisdiction will allow a referendum like CH.
I find the whole situation quite hopeless, it’s why as a Kiwi I ran to relinquish my US citizenship. I have nothing to hide, am evading no taxes and live a less than middle class life here (no threshold exceeded and certainly no assets to be concerned over). That being said, since I no longer wish to return to the US for any reason, I refuse to remain connected to them and have my personal privacy constantly on the attack. I’m sick of feeling like some sort of traitor to the US. Also, NZ tries damn hard to get in bed with the US over everything (at least the current National government kisses ass like there’s no tomorrow, and the opposition? Well, they would likely just do it out of fear since they can be spineless). I’m sure NZ will sign up to FATCA because when the USA says “jump” to the NZ government the NZ government always says “how high?”. Look at the fiasco with Mega and NZ getting into bed with the FBI for illegal raids, search and seizures, what a shambles that was/is. Anyway, I just have to get my tax final filings in order and rid myself of the US insanity.
Note Moby’s comments here…
The Attorney-General has to report to parliament on rights implications of bills: http://www.legislation.govt.nz/act/public/1990/0109/latest/DLM225503.html
The AG called out another bill today on rights grounds:
I suggest targeting Minister Finlayson to make sure his Section 7 report on the bill implementing FATCA needs to come to a similar conclusion as per the alcohol bill but this time on discrimination grounds.
Doesn’t the fact that people are handing in their Blue books tell the US something? After WWII people actually wanted US citizenship and now they’re after some soul searching willing to give it up.
And many of these people are well educated not the poor high school drop outs of America’s inner city schools you see everyday on public transport. These people were ambassadors of the US and now they are its fiercest opponents. Does any of this make sense?
The world has moved on Mr Grassley, Schumer, and the other Congressional bird brains who think FATCA is a good idea.
There are many who are convinced that the renunciations are the ONLY way of getting the US’s attention. Let’s not overlook the fact that there will be fewer births abroad being registered for US citizenship, and fewer high value immigrants to the US as a result of CBT. They are shooting themselves in the foot.
@Bubblebustin and Don…
You know, they never even feel the flesh wound from their own guns discharge, and frankly don’t care if a toe or two is shot off. They satisfy themselves by looking myopically at all the poor immigrants that want in, and refuse to see any contra signs that all is not well with their taxation policy. How do you help those that choose not to see? I wished there was a personal penalty for their willful blindness, but Cassandras are never appreciated by those creating and supporting the policies, and so all we can do is warn those who will listen.
It is sad to think that an Illegal Alien living in the USA has more rights and benefits from the US than any US person does that lives out of the USA……
Just an update on this – although the bill was listed on the parliament Order Paper yesterday, it seems that is just a list of upcoming business. The bill has not been read yet and seems likely this will happen next week. The Attorney General has also been notified that the bill breaches the Bill of Rights and I believe he has a duty to inform parliament of this.
New Zealand is an interesting test case, as I think they are the first country to attempt to put legislation through the Parliament before the IGA has even been signed. Not sure of their motives for that, but we will see how it pans out.
If anyone wants to see what is said, it can be followed here: http://www.parliament.nz/en-nz/pb/debates/
Thanks for that update and reference… Still time for some sleeping Kiwis to wake up that this is happening…. We need an NZ Isaac Brock activist community.
Regarding “willful blindness” to the surge in US expatriation…
An alarming sign of America’s dysfunctional and willful blindness is its pathological culture of gun entitlement and its subsequent epidemic of firearm deaths and injuries. The US has more guns and gun deaths than any other developed country in the world. A study by two New York City doctors found that the U.S. has 88 guns per 100 people and 10 gun-related deaths per 100,000 people — more than any of the other 27 developed countries they studied. (ABC news, Sept 2013)
Despite high profile massacres with legally obtained assault weapons at a movie theater and primary school, despite slayings inside a secure Navy facility by a disturbed employee with a security clearance, despite a congresswoman being shot at a town hall meeting with a legally-obtained handgun, recent attempts to legislate even minor restrictions on access to firearms have failed.
If Americans will not address the root cause of gun violence in their own schools and workplaces, if they tolerate the death or injury of thousands of their own citizens on their own soil, why expect them to care about the remote issue of people in other countries relinquishing US citizenship? The overwhelming majority of Americans don’t know about this – and probably would not care if they did. When surveyed by National Geographic only 37% of 18-24 year old Americans could find Iraq on a map. The US State Departments lists 118 million valid passports in circulation (2012) – approx. 2/3 of the US population does not have a passport.
Who needs a passport when you live in the greatest bubble on earth?
@osgood. I am hoping New Zealand is doing the right thing. New Zealand senators can vote for what they think is right. There is no pressure for the New Zealand government (except from the threat of the US) to have that law passed.
Say the legislation fails in parliament. Then they can tell the US: sorry, ‘sorry, we tried, we couldn’t change our laws to accomodate your extraterritorial law. Can’t sign and IGA, and BTW, our banks can’t send the data either, because that would breach our laws. We can only agree to send data on non residents. And we’ll fight your 30% withdrawal if you try to apply it.’
Now, take the case of countries that have signed but haven’t modified their laws yet. Now, they are under tremendous pressure to do it, as it would be humiliating to have signed something they can’t honor. This is not democratic process anymore. Their finance ministries have signed something that requires legislation, that probably most of their senators are not aware of.
Of course, they can probably pass it as an omnibus type bill, hidden in some other piece of legislation, promoting combating tax evasion without any discussion on consequences on their own citizens with US connection. Legislation by stealth…. Despicable.
Can’t wait until accidentals or spouses of US citizens start suing their own bank and governments.
Taken from the Ask your FATCA question thread and placed here for subject continuity.
Duke of Devon says
December 3, 2013 at 11:21 pm
With respect to New zealand’s IGANew Zealand IGA
Unfortunately this limit or 250K applies to so called entity accounts. The threshold for individual accounts is still 50K.
The NZ inland revenue is so bad they simply take the IRS regs and transpose them word for word. They even call NZ banks ‘foreign’
It gets worse- there is no mention of an exemption for retirement accounts.
The Attorney-General has been notified that the bill about to be debated by the NZ parliament next Tuesday potentially breaches the following sections of the Bill of Rights Act 1990:
Section 9: the right not to be subjected to degrading, or disproportionately severe treatment or punishment
Section 19: the right to freedom from discrimination
Section 21: the right to be secure against unreasonable search or seizure
In case you think America has a corner on Taxing retirement accounts and absurd tax confiscation policies…
Kiwis: Read this and weep
Diana Clement: Taxman lines up king hit on overseas pensions
You think it is bad enough for a UK citizen that moved to NZ and had a retirement account back in the UK, but what if you had an “U.S. Person” toxic tag on you too, you are toast!
This is stunning. The governments of the world are determined to kill retirement savings for their citizens and grab the taxes. Another assault on the middle class by the taxing bureaucrat elites! No wonder these guys bow down to the IRS. They never found a taxing opportunity that they didn’t like…
Just received this email…
The FATCA bill “Taxation (Annual Rates, Employee Allowances, and Remedial Matters)” had it’s first reading in parliament yesterday.
To my delight, and surprise, David Clark (Labour) and Andrew Williams (NZ First) made substantive comments about FATCA.
I received an email from David Clark’s assistant acknowledging my correspondence and I am certain that my correspondence to Winston Peters was passed to Andrew Williams. His comments are particularly gratifying as he raised the issue of NZ Sovereignty and basically read out the list of questions contained in my email.
The replays can be seen as follows:
The introduction of the bill is here: http://inthehouse.co.nz/node/22517 (Comments on FATCA run from 5:14 to 6:23 – note the interruption from the floor)
David Clark (email@example.com): http://inthehouse.co.nz/node/22518 (Comments on FATCA run from 6:35 until 10:49)
Andrew Williams (Andrew.firstname.lastname@example.org): http://inthehouse.co.nz/node/22523 (Comments on FATCA run from 0:50 until 2:40)
I have sent email to both of these guys expressing my thanks for recognizing my correspondence and raising the issues.
This deserves a wider audience. When you have a chance maybe you could post links to these videos on IBS?
This is hard work, but it’s nice to see some reward rather than Todd McClay’s patronizing remarks.
Thanks Just Me. It behooves us all to follow what is happening outside of our own home countries – as the FATCA enablers tend to crib from the same cheatsheet of propaganda written by the US Treasury. A bank is a bank, and the bank lobby all want the same thing.
@ Just Me
The first speaker, Clark, really seemed more focused on what will NZ get in exchange from the USA (we already know the answer — bupkiss) but the second speaker, Williams, got at least part way into the long list of FATCA questions which need answering. The best thing is that they both brought attention to FATCA and that is a good beginning. Your FATCA info deposit has paid a dividend … more to come we hope. BTW, I’d kick in for a new computer for that poor guy at IR who just can’t seem to keep up … IF NZ will rethink and retract that IGA. 😉
That’s a spectacular achievement, congratulations!
I agree with Em’s observations. Mr Williams seems to be a lot more clued in than Mr Clark, though I’m confident you gave each the same degree of good information. Also, some of what Mr Williams said sounds like it could have come directly from you 🙂 Mr Clark made a better theatrical presentation, for what that’s worth.
@Badger, Bubblebustin and Em…
Just for clarity, it hasn’t been me that has been giving these politicians the good information. It is our Kiwi friend Osgood who barely has time in a busy normal work and family life to check in and comment here occasionally. He has been dogged, and has the credentials I don’t have to make the case. They are listening, and I am following up with email support of his efforts. We just need more Kiwis like him.
Good work Osgood! Good back-up Just Me! We all know it isn’t easy getting FATCA into the political agenda.
Kiwi-American are voting with their feet:
New Zealand IRD has a new information page entitled “The shift to automatic exchange of information between tax administrations”.
Clearly, the OECD direction is being embraced in New Zealand.
Well, I supposed it is to be expected, that the tax bureaucrats at the IRD would love GATCA