Well, it’s official. The UK has signed on. Great Britain expects the Agreement Will Strengthen UK Ability to Tackle Tax Evasion.
That, of course, is dependent on whether US banks and US government are truly going to provide reciprocity. We all know that is far from a done deal as Florida (and other) Bankers Kick Up A Fuss.
The new rule, which goes into effect Jan. 1, requires banks to report information to the Internal Revenue Service on non-taxable interest paid on accounts held by non-resident foreign nationals
Read more here: http://www.miamiherald.com/2012/09/02/2982225/florida-bankers-spread-the-word.html#storylink=cpy#storylink=cpy
The operative phrase here is “non-resident foreign national”. There is no real reciprocity since the report doesn’t cover resident foreign nationals. This is in complete contrast to the U.S. which wants foreign financial institutions to report on their RESIDENT U.S. nationals.
You would think that the U.K. and the others who signed on, would be able to see how this is lopsided agreement.
Someone over at Brock living in the UK actually received a personalized letter from David Gauke who is the Associate Finance Minister in the UK(equivilent to Flaherty’s deputies Shelly Glover and Ted Menzies) who actually negotiated this thing with the US.
This is comment from Brock:
He defends the govt’s approach as “practical, proportionate, and mutually beneficial”, but does not address the issues I raised of UK residents, and perhaps citizens, being unable to open accounts due to their US person status. The subtext is that protecting banks from 30% withholding is more important than individual access to banking and investment.
There is must be a ministerial dictionary of “weasel words” that government minister in all countries are given. Having said that Flaherty’s weasel words are much stronger than this David Guake’s weasel word replies. The truth of the matter is the information the UK is going to receive from the US regarding UK resident accountholders is EXACTLY the same information Canada and only Canada has received from the US since 1994. Its quite clear if you read the UK governments press release quite a lot of lipstick was put on the pig.
@Recalcitrant: Agree. Yet, the US banks and legislators are kicking up a fuss at even providing the information on residents of other countries. It’s hypocrisy. There is also another H word for it–Haven (as in US is biggest tax haven of all).
As you probably know, Canada has had a long-standing (about 70 years) with United States of Arrogance to exchange information on each other’s residents. That should be enough. Hopefully, our government won’t be conned into doing anything more.
The US is a big fat TAX HAVEN:
– http://www.miamiherald.com/2012/09/02/2982225/florida-bankers-spread-the-word.html
– http://www.southernstudies.org/2012/07/mexican-drug-cartels-and-the-us-banking-industry.html
– http://www.reuters.com/article/2012/05/03/us-hsbcusa-probes-idUSBRE8420FX20120503
– http://www.aljazeera.com/indepth/features/2012/06/201261515312418850.html
– http://www.time.com/time/business/article/0,8599,1933288,00.html
– http://www.guardian.co.uk/business/2012/sep/15/us-banks-safeguarding-failures?newsfeed=true
– http://www.financialtaskforce.org/2011/05/19/u-s-banks-picking-mexican-drug-cartels-side-in-the-u-s-s-war-on-drugs/
– See: http://therealnews.com/t2/index.php?option=com_content&task=view&id=31&Itemid=74&jumival=8629
– http://www.guardian.co.uk/world/2011/apr/03/us-bank-mexico-drug-gangs?
– http://www.bloomberg.com/news/2010-07-07/wachovia-s-drug-habit.html
@Tim: Thanks. Wall Street Journal is now reporting “other deals may not allow for that exchange.” They do not give the source for that information.
http://blogs.wsj.com/corruption-currents/2012/09/14/u-s-u-k-sign-pact-to-enforce-fatca/
From Jersey International Business School: There is much that still demands clarification, but increasingly FATCA looks to be more a negotiating strategy than real legislation. The goal is now clear: a global tax information-sharing network that will make significantly more difficult for individuals across the globe to hide assets overseas, away from the prying eyes of domestic tax authorities.
http://www.jerseyibs.com/blog/index.php
Most of us agree it should be difficult to hide assets overseas to avoid paying tax at home. Most of us have our assets in banks close to our homes in the countries where we live. Those assets were earned, saved, invested and taxed at home. We’ve already paid taxes on income generated from those assets to our “domestic tax authorities.”
My “domestic tax authority” is not the one with “prying eyes.” Rather, it is “prying eyes” of International Robbery Society (IRS) that are the problem.
IRS, cast your “prying eyes” on Romney, et. al. Leave honest, responsible, law-abiding taxpayers outside your boundaries alone.
The dominoes are falling….
Thanks for the links, Blaze. I read the Miama Herald article. My my, isn’t it interesting how US bankers have similar concerns to ours when the shoe is on the other foot. And how no one connects the dots to how, if FATCA is bad for Americans, maybe it’s also bad for other countries and residents of those countries too. This isn’t “exeptionalism,” this is more akin to collective autism or some other psychiatric clinical condition that renders a person unable to empathize with anyone other than him or herself. Sadly a widespread condition among Americans, one they didn’t have when I was growing up there (as far as I can recall, at least most of them).
The Herald notes that the reporting requirements are for any account that generates more than $10 (sic!!!) of interest in a year. Those aren’t minnows; those are microscopic algae. This has gone beyond absurd and into a mental patient’s version of The Twilight Zone. What does that say about the collective mental health of the US government?
Articles in the US Press that can be commented on:
http://thehill.com/blogs/on-the-money/domestic-taxes/249621-us-uk-sign-tax-agreement-
http://www.ft.com/intl/cms/s/0/27757d4c-000b-11e2-a30e-00144feabdc0.html
Financial Times: “US tax net closes on Americans living in Britain”
http://www.ft.com/intl/cms/s/0/c2b09b66-0272-11e2-9e53-00144feabdc0.html#axzz273BICDjB
A question I keep asking is whether non-reportable accounts, such as retirement plans, would be aggregated with reportable accounts in the determination of account value thresholds.If anyone can point me to an answer, now that there has been one IGA, it would be appreciated.