Category Archives: Issues regarding US persons abroad

September 30, 2013 by Ellen Wallace

BERN, SWITZERLAND – The urgency for Switzerland to sign an agreement to work with the US Fatca law may have been exaggerated, with Bern announcing 30 September that Swiss banks have six months of grace to implement it.

Fatca is scheduled to go into effect in January 2014 but for the umpteenth time the complex Foreign Account Tax Compliance Act start date has been pushed back.

Geneva Lunch

 Entry into force of FATCA agreement between Switzerland and United States delayed by six months
Bern, 30.09.2013 – Switzerland and the United States have amended the FATCA agreement in line with the new timetable for FATCA implementation by means of an exchange of notes. Swiss financial institutions now have to implement FATCA from 1 July 2014 rather than from 1 January 2014.

On 12 July 2013, the US Department of the Treasury announced that FATCA implementation by foreign financial institutions would be postponed by six months. As the FATCA agreement signed between Switzerland and the United States on 14 February 2013 was based on the earlier timetable with commencement on 1 January 2014, it had to be adjusted to the new schedule.

This amendment lies within the authority of the Federal Council and assures Swiss financial institutions the same implementation deadlines as financial institutions in other countries. The agreement was amended by means of an exchange of notes. The amendment will enter into force at the same time as the FATCA agreement.

The agreement was approved and the implementing act adopted in the final vote of parliament on 27 September 2013. The changes necessitated by the postponement are taken into account in the federal decree and in the act. The FATCA agreement and the implementing act are subject to an optional referendum.

 The Federal Authorities of the Swiss Confederation

It is no secret that the “urgency” has been exaggerated.  It is common knowledge that Switzerland has been threatened into signing up to FATCA so that other nations would be more easily scared too.

However, before making this decision, you should be aware that individuals rescinding their US citizenship after June 2008 may be subject to considerable US income tax upon
expatriation. In addition, gift tax may be imposed on the recipient of a gift from an expatriate. Unless you qualify for a specific exception to the rules, the “exit tax” provisions are imposed on expatriating individuals who meet any one of the following criteria:
1. Have a net worth over $2 million on the date of expatriation, or
2. Average US income tax liability for the 5 years preceding the date of expatriation exceeds a certain amount that is indexed to inflation (US$155,000 for 2013), or
3. Have not complied with all US federal tax obligations for the 5 years preceding the expatriation date.

BMO Nesbitt Burns: US Citizens Living in Canada, Income Tax Considerations

https://www.facebook.com/events/1378041625754057/?ref=22

Join CEO of the SACC, Martin Naville, and world leading experts on the Foreign Account Tax Compliance Act (FATCA) for an entertaining panel discussion on FATCA, and its implications on US and foreign persons, individuals as well as corporate.

Topics addressed (not for tax experts only):…

–  What will FATCA bring the US Treasury in additional revenues?

–  Do these revenues justify the enormous costs corporations are facing in order to implement this legislative rule?

–  Will these rules jeopardize other country’s privacy rights? What about my own privacy?

–  Will FATCA make me want to renounce my US citizenship?

Venue: UBS
1285 Avenue of the Americas, Conference Room 14th Fl
New York, NY 10019

Time:
6:00 p.m. – 8:00 p.m.

Fee:
US $ 30.00 Member, US $ 50.00 Non-Member

Additional Information:
RSVP: Tina Ross
e-mail (tross@sbsny.org)
Phone (212) 246-0655 ext. 201

Dress code: Business attire

Please see the official invite here:
http://www.amcham.ch/events/downloads/130930_NY_the_empire_strikes_back_us_tax_reporting.pdf

“En Nicaragua he notado como que las personas todavía tienen una falsa esperanza, por así decirlo, que tal vez Fatca se acabe, que tal vez el gobierno americano cambie de opinión (…) Muchos clientes todavía no saben de esa ley porque los bancos todavía no han tomado los pasos para notificar a sus clientes”, afirma.

Google translation:

“In Nicaragua I noticed how people still have a false hope, so to speak, that perhaps FATCA is over, maybe the U.S. government to change its mind (…) Many customers still do not know the law because banks have not yet taken steps to notify their customers, ” he says.

Source

and an oldie but a goodie.

Here’s an excellent article from the National Post.

27/09/13 5:23 American expats feeling less free as draconian tax law kicks in

This is another side of the story which is less discussed.  I don’t have any time to translate right now, so here is the google translation:

Much effort for corporations

Each group now has to analyze hundreds of worldwide Group companies in order to clarify exactly how it is affected by the FATCA. Companies such as ABB, Holcim, Nestlé and Novartis Check this moment. According to Novartis tax expert Roxana Leske to be seen not least affected by the U.S. rules Due to the necessary clarifications and additional information to be specified obligations to document many companies.

For groups of companies from the industry’s activities are affected by the FATCA, according to expert estimates, less than 1%. The affected companies have until mid-2014, time to register these units in the U.S. tax authorities. A failure can be costly: A withholding tax of 30% is due, and it threatens even buses when was violate local laws.However, the Group’s internal review is still necessary for any other reason. Because the corporations want to invest in U.S. securities, they must specify their FATCA status at the bank, which in turn is under the FATCA.

Even smaller companies

About their banking relationship even small companies can be acquired without financial activities, if they are owned by Americans. For U.S. citizens must also be reported by the bank, if the company is a majority-passive activities. This is to prevent U.S. citizens hide their money from the treasury by companies are interposed. For the U.S. tax authorities of the marginal benefit in getting wider fight against tax evasion takes Although source, however, doubt the network is rather too far ejected and thus includes companies that are the authorities perhaps never report in practice a U.S. taxpayer. The U.S. system is to suppress all just kind of possible workarounds, so that as no tax evaders more falls through the cracks.

US-Monstergesetz trifft auch die Industrie