All I need to say is compliance with FATCA is basically impossible under Brazil’s constitution according to the Brazilian Bankers Association. The proposed solution is again intergovernment agreement but I wonder how that will play in Brazil’s fairly nationalistic politics.
http://bsmlegal.com/PDFs/Federation%20of%20Brazilian%20Banks.pdf
Housing bust gives agencies a tax windfall
“I was shocked about how much I owed,” says Stephen Buckman, who had to pay the Internal Revenue Service $1,500 when he filed his 2011 taxes. In December 2010, a bank foreclosed on his Phoenix townhouse, which had plunged in value to $50,000 from the $196,000 he paid in 2006.
Public hearings on FATCA are taking place in Washington on May 15?
http://www.ft.com/intl/cms/s/0/8431a6d0-8d5d-11e1-9798-00144feab49a.html#axzz1taOxefA6
Mondaq.com is running the headline “The Netherlands to join Joint FATCA Statement”. This appears to be lifted from an English-language newsletter issued last week by Amsterdam-based law firm De Brauw Blackstone Westbroek. Don’t get the wrong impression, though — no agreement has yet been negotiated. The most recent news is that Finance Secretary Frans Weekers stated last week (link available in Dutch only) that the Netherlands is open in principle to joining FATCA. But the cross-border services providers have managed to miss (or to bury) the real news. Last week some Second Chamber members submitted written questions to Weekers (also in Dutch only; see here for Google Translate’s rendering). I’ve manually translated some of the interesting bits. I am disappointed by many of Weekers’ responses, both for their attitude towards the democratic process and their apparent lack of understanding about FATCA’s effects on bona fide residents of his country who have no financial connection to the U.S. besides their passports.
So the U.S. wants to impose a 30% withholding penalty on the U.S. source payments of; interest, dividends and securities transactions that are conducted by non FATCA compliant Foreign Financial Institutions and recalcitrant account holders. Now of course the question is, what happens if there is a mistake that is made by the U.S.? Will you get your money back? I believe that the short answer to that question is, no one knows. What the U.S. may promise to do and what it ends up doing are often two different things. From what I have observed of U.S. policy is that when it comes to returning ill-gotten gains the U.S. doesn’t give everything back. A case in point is the softwood lumber dispute.
In the softwood lumber agreement that was reached between Canada and the U.S. the U.S. only agreed to give back 80% of what it had collected. Now why would you as an investor take a chance that 30% of your rightful financial property could be withheld? What would it cost you in time and effort to get the money that is rightfully yours? What is to stop the U.S. from using this 30% withholding requirement as a means to fund its failed government fiscal policies?
http://www.cbc.ca/news/background/softwood_lumber/
As a person who is not a U.S. citizen this whole legislation introduces a new degree of risk without any financial return possible so why would you expose your precious capital to such a ruinous outcome? With FATCA and of citizenship based taxation the U.S. has just found another way to cripple world capital markets by introducing more regulation and risk. Neither of which will generate a dollar in wealth.
So now we know that Canadian banks not only received bailout funds (in other words taxpayer money) from Canada but also the US.
Let’s do a thought experiment. What are the implications of this? The loans were repaid, but what if another financial crisis arises and banks have to go begging for money again? Could the US government use it as leverage to force Canadian FIs to comply with not only FATCA but who knows what other crazy laws they come up with?
Thoughts?
Fox news reports that the EPA’s Al Armendariz, after coming under scrutiny for a comment that he made in 2010:
Armendariz made the original remarks at a local Texas government meeting in 2010. He relayed to the audience what he described as a “crude” analogy he once told his staff about his “philosophy of enforcement.” Continue reading
Boy unlike the big banks in the FATCA partner countries are they pissed in their comment letter.
A couple of key points:
1. Still very concerned about the remittance issue with credit unions in Central America.
2. Want an almost complete exemption for all credit unions from FATCA.
3. Basically impossible in terms of resources for credit unions to fully comply with FATCA even if they wanted to.
4. Want to be able to accept local resident US Persons without a reporting obligation
5. Significant number of credit unions will be non participating no matter what.
It will be interesting to see how this turns out. The left is always a huge fan of credit unions. I wonder how they will play this.
In case anybody missed this. The Greenback OVDI video described in this post has been removed.
Good news!
While this has been metioned prior US Senator Rand Paul has become quite vocal in his opposition to the US Senate ratifying several new tax treaties on what he calls Fourth Amendment grounds. Link below:
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