The OECD has released its “Common Reporting Standard,” a.k.a. a global “Standard for Automatic Exchange of Financial Account Information.” The plan more or less tracks the so-called “intergovernmental agreements” (IGAs) that the US Treasury is using to try to get the Foreign Account Tax Compliance Act working. But the OECD’s model for the world differs in two critical respects:
1 it is based on the global standard of residence-based taxation
2 it would require reciprocity
Readers of my prior work (on soft law, on the OECD’s norm-creating role, and on its grappling with the issue of sovereignty) will know that I am cautious about the premise of accepting proclamations of the OECD about “global” tax norms.
In the case of residence-based taxation, however, this is not an OECD-created norm but one that dates to the very beginnings of modern income taxation and while flawed is the best available structure if more than one country in the world is going to have an income tax and people are going to be allowed to leave their countries freely if they so choose. Relax either of those assumptions and legal status-based taxation might become technically feasible, though it would still be fundamentally unjust. Neither is the reciprocity norm an OECD invention: instead, its roots trace back to post-Westphalian fundamental international legal principles.
The OECD’s forging ahead with a plan that more or less relies heavily on US acceptance is eerily reminiscent of the last OECD attempt to curb tax evasion, via the harmful tax practices initiative. The US first supporting and then completely reversing course eviscerated that effort, thus cementing the status quo we witness today.
US exceptionalism with respect to who should be considered its residents and what it can be compelled to share with other countries cannot help but perpetuate a grave reciprocity imbalance that will only be exacerbated if the US does not sign up to the OECD standard, and the OECD accepts a carve-out to accommodate it.
Given that efforts toward a repeal of FATCA and an ongoing legal challenge to data reporting by US banks are currently unfolding in the US, the OECD’s report comes at an interesting juncture in the process of picking up where the harmful tax practices project left off. It could unfortunately foreshadow a repeat of the events that unfolded in that project circa 2001. Or, more optimistically, it could be that the OECD report is a means of giving the US a reason and the political cover to bring its antiquated status-based tax regime up to date with the global residence-based standard, and its one-sided view of the value of data sharing in line with how the rest of the world views things. That would make global automatic data exchange of offshore financial accounts a much more clearly positive development overall, leaving room to focus on solving the other outstanding issues. Only time will tell which way this will unfold.
http://taxpol.blogspot.ca
Revealing and informative post about America today from @Mopsicktaxlaw – Confirms one world #FATCA
@Mopsicktaxlaw Liked ur post http://t.co/zX4dOZ9HWe #FATCA #FBAR r the expression of a tyrannical gov. U know FBAR was never related to tax
— U.S. Citizen Abroad (@USCitizenAbroad) February 14, 2014
@Mopsicktaxlaw "When people fear the gov there is tyranny, when gov fears the people there is liberty" What's happening in America today?
— U.S. Citizen Abroad (@USCitizenAbroad) February 14, 2014
I am a fan of Mr. Mospick and his blog. Mr. Mopsick has done much to reveal the injustice of citizenship-based taxation. He has publicly stated his opposition to “citizenship-based taxation”. For this he deserves credit. His latest post, although ostensibly about FATCA, reveals much more. He confirms the erosion of privacy and the “one world” agenda of FATCA.
If you REALLY understood FATCA, you would NOT support it!!
My letter to CARP: (please feel free to edit as you like and send to whoever you like)
Some politicians have used the very myopic argument that USA has the right to determine its own taxation rules. Of course it does, so does Canada, but does USA have the right to impose US taxation rules on Canadian citizens living in Canada who have never earned a dime of US source income? Even if you think so, and I can’t imagine why anyone would, does USA have the right through its taxation laws to prevent some Canadians from effectively planning and saving for their retirement?
This is what FATCA in combination with USA’s unique to the world citizenship-based taxation laws will do to Canadians and their families where one family member is deemed to have ‘US person‘ status.
FATCA and China: still no news, just opinions, fantasies, and bad analogies
Seeing as it’s been nearly eight months since I last wrote about this topic, I figured there’d be something new to say. But there really isn’t. The “best effort” negotiations conducted “as early as practicable” last summer with the aim of reaching a FATCA IGA “in advance of the January 2014 deadline in the legislation” have clearly produced no results, as law firm Dezan Shira’s China Briefing noted last week. Interestingly, mainland financial magazine Caijing reported on Dezan Shira’s article just yesterday — but only in English, not in Chinese. Other Compliance-Industrial Complex members are less honest about the lack of FATCA progress in China, and have taken to calling a pedestrian set of updated Chinese asset self-declaration regulations by the misleading name of “China FATCA” in an effort to generate hype.
The biggest genuine FATCA news I have to report is that finally, for the first time in nearly a year, a Hong Kong newspaper decided to let someone besides Patrick Yip at Deloitte and Jennifer Wong at KPMG say something about FATCA. Du Jinsong — apparently an MD in equity derivatives trading at Bank of China (International) Hong Kong — wrote a short opinion column in Wen Wei Po, one of Hong Kong’s “traditional left” pro-Beijing newspapers, telling us something we already know: Hong Kong’s finance industry would really like a FATCA IGA. What’s interesting about this column is the way in which he says it: he presents FATCA as a grand opportunity for Hong Kong to gain valuable “experience” with automatic information exchange and to help China to expand the previously-mentioned pedestrian set of updated asset self-declaration regulations into genuine control of the international financial system.
Not “China FATCA”: foreign asset self-reporting under China’s new International Payments Statistical Declaration Regulations
At the beginning of this year, China began implemented a new system of self-reporting for foreign assets by amending two-decade-old regulations which required reporting of foreign transactions. Though these amendments do not add any new reporting requirements for financial institutions, neither the old nor new regulations ever applied to Chinese citizens permanently resident abroad, they don’t violate the privacy laws of foreign countries, and the implementation of the regulations is actually proceeding on schedule rather than being delayed by years, the Compliance-Industrial complex has been quick to saddle it with the inaccurate name of “China’s FATCA”.
For a translation of the regulations and a brief analysis of the impact of the amendments, keep reading. This post probably won’t be of much use to U.S. Persons seeking practical advice for dealing with the citizenship-based taxation mess that the Homelanders have thrown at us; it’s a supplement to my next post that’s actually about China and FATCA.
Quick Request
Hi
I know we had a problem last time but the new Meetup Group seems to have met all the conditions……Please, could people join? We have 2 new people there and only 4 of us.
http://www.meetup.com/US-Expats-Toronto/
Thanks,
Trishia/nobledreamer
URGENT: Educate Your MP about FATCA Now!
Many of us who have been part of the community here at Isaac Brock Society, have been writing our various MPs, the Finance Minister, and other politicians on a regular basis for months now to complain about FATCA. The Conservative government ignored our pleas and signed a deal with the devil, selling the soul of Canadian sovereignty along with the rights of a sub-class of Canadians, in return for the removal of extortionate threats directed at Canadian banks.
Until very recently, few Canadians with ‘US person’ status, living in Canada, had even heard of FATCA, never mind USA’s unique to the world citizenship-based taxation laws. Those numbers are starting to increase rather dramatically as is evident by the many new visitors to this website. If all our new ANTI-FATCA friends would also take some time to educate their MPs about FATCA, and ask them to do something to stop it, they might start to think twice about ramming FATCA down the throats of 1 million plus voters.
Disconcertingly, it has been apparent from some of the recent comments we’ve heard from certain MPs regarding the signed IGA, that many are unaware of the grievous harm that FATCA in combination with citizenship-based taxation will do to Canadians with ‘US person’ status. Since it appears that the Conservative party’s intent is to push FATCA through parliament as stealthily as possible, it is imperative that our MPs actually understand what they are voting for, or hopefully AGAINST!
If you haven’t already, and even if you have, please email or write your MP, and help him/her to understand the ugly truth about FATCA and citizenship-based taxation.
Backbench Conservative MP’s attack Jim Flaherty, Kevin Shoom, and Brian J Ernewein(kind of)
On something with nothing to do with FATCA but o’h so sweet.
The problem for Mr. Harper, say MPs and Tory insiders, is the 2011 promise is “overwhelmingly popular” among both Conservative members of Parliament and party rank and file who see it as correcting an “anti-family” bias in the tax system that penalizes single-income families.
At least three cabinet ministers, including Employment Minister Jason Kenney and Treasury Board President Tony Clement, have said they believe the government is obliged to deliver on its campaign promise as written.
Tory MPs opposed to abandoning the pledge say it would be a blow to rank-and-file supporters should the government shelve the idea. “Most MPs will tell you it’s one of the most popular things they’ve ever campaigned on,” one Conservative MP said. “Finance bureaucrats don’t like it? Too bad. We keep our platform commitments and this is both good policy and politics.”
Said a second Tory MP: “This is not dead. Far far from it.”
We need to keep up the pressure and our education efforts on backbench Tory MP’s. Try to split them away from Jim Flaherty and “Finance bureaucrats” over FATCA. Then remember what that “second Tory MP” said.
#GATCA is born at the #OECD, and #FATCA is the Proud Father
As long time IBS readers have known, we have been saying that a global GATCA was the ultimate goal of the FATCA mis-adventure. It was the dream of the ideologues in Treasury and the IRS who who have been responsible for the implementation of FATCA.
The most recent posting about GATCA on Isaac Brock in this article by Alex Newman
From FATCA to GATCA – Alex Newman hits another home run
Update 2/17: Alex has a new article out…
Globalists Unveil Socialist-backed New World Tax Regime
Maybe Obama, when he launched his offshore jihad didn’t understand what he was doing. (video here) Maybe Congressman in their FATCA PR announcements back in 2009, were just witless vassal’s and didn’t know it. Certainly few Congressman knew they passed it hidden in stealth in the Hire Act, but this is what we now are getting. A gotcha GATCA!
If you search for GATCA terms in archives you will find other earlier pieces last year like here, and the references go back farther in the comments. We were watching for the blow back onto domestic shores in the form of the reciprocity DATCA, the history of which is documented here., but it is beginning to look like that GATCA will get here first. Will America’s Congress accept it? Time will tell, as they say.
Today, after a lot of anticipation, we now have the official birth announcement, on the web site of the OECD , Jesse Eggert’s new employer.
Standard for Automatic Exchange of Financial Account Information
Get used to the new acronym that is common in the OECD and FCC (FATCA Compliance Complex) parlance,
AEOI or Automatic Exchange of Information.
I have a feeling you will be seeing it or some variation of it more often now.
Bottom line, AEOI = GATCA and this monster was created by the Union of its FATCA Father and OECD mother.
Citizenship-based taxation is a human rights abuse, and the United States is a serial human rights abuser
I often find myself in discussion with some Homelanders and Obama supporters about whether US citizenship-based taxation is a human rights abuse. Below is my argument, first published August 21, 2012, to say that it is unfair. Now I argue that with the implementation of FATCA, the USA has become a serial human rights abuser. Clearly, most people of reasonable conscience accept these kinds of arguments. Even yesterday, I manage to get a chuckle out of an AP reporter who was asking for my story. I mentioned my birth in Chicago, Illinois, and moving as a baby to Alaska. Off the cuff, I said, “Yet Illinois isn’t chasing me around the globe expecting me to pay state income tax.” That’s because once you leave a state, you can no longer benefit from the proceeds of taxation. It is a no brainer. Yet it is not self-evident to Congress and the IRS, which are pursuing US expats across the globe with FATCA regulations in order to make them pay taxes for the benefit of Homelanders.
