This is music to our ears. At least, the headline is.
American Banker is reporting FATCA Is Far From A Done Deal.
Author Jon Matonis says:
It is either the reciprocity angle or the cascade effect of China’s reluctance that has the greatest potential to derail FATCA.
He also points out:
U.S. is one of the worst offenders globally when it comes to tax havens and “secrecy jurisdictions.”
One point makes me wonder if Mr. Matonis has the total picture:
With global transparency on the increase and more countries considering taxation on citizens’ worldwide income as a way to combat growing budget deficits, reciprocity with U.S. financial institutions starts to look appealing.
The concern about that statement is most countries do tax their residents on world-wide income. They just don’t stalk their citizens living elsewhere for money.
Does this statement mean the author does not understand that or does it mean other countries are about to become copycats? I can just see it when Russia, China, Cuba, Kenya and Saudi Arabia begin to demand reciprocity on people who immigrated to US and became citizens and now the US must report back to those countries on the financial affairs of American citizens and the children of those citizens who were born in U.S.
Mr. Matonis concludes:
Although experts in the FATCA preparation business tend to agree that moving forward with expensive FATCA compliance plans is the prudent and logical step to be taking now, a comprehensive and worldwide FATCA roll-out is far from a foregone conclusion. For those financial institutions and their shareholders offended by the overreaching legislation and lack of respect for mutual sovereignty, the cost savings alone may start to make FATCA’s non-compliance penalties look tolerable.
Of course, that is more more money into the coffers of International Robbery Society of United States of Arrogance..
5 thoughts on “FATCA Is Far From A Done Deal”
Most of what Jon Matonis writes is a regurgitation of what we all know already, but he did say something interesting: “It is either the reciprocity angle or the cascade effect of China’s reluctance that has the greatest potential to derail FATCA.” With the current lack of impetus Congress seems to have in repealing FATCA, repeal will most likely happen later when other countries retaliate against the US for not holding up their end of their IGA agreements. Should Canada take the disingenuous step of signing an IGA believing it’s potentially the best way to defeat FATCA? NO. Should Canada hope to create a “cascade effect” by not signing? Canada should respond to the US’s extortionate behaviour by telling them to go take a flying f*ck and tell the US that we will hit them with every method of retaliation at our disposal should the US go through with FATCA. Instead we have a bunch of pussies who are letting a bunch of greedy scaredy-fatcats (the banks) push them into betraying 1 M Canadian residents and their families. Until repeal becomes real, the FATCA train barrels along full steam ahead, no matter how many IGA’s are signed or how many countries are reluctant to sign them.
Wish I could remember when/where I read a particular company saying that it was better to take the hit of the penalty and not comply than otherwise. It was quite a long time ago. If a particular institution had very few US Persons and non-problematic “indicia,” it would seem very likely that non-compliance could be a less-expensive choice.
If you have nothing to extort, you won’t be a victim of extortion.
Go, Bubblebustin! I’m with you on that sentiment!
“I can just see it when Russia, China, Cuba, Kenya and Saudi Arabia begin to demand reciprocity on people who immigrated to US and became citizens and now the US must report back to those countries on the financial affairs of American citizens and the children of those citizens who were born in U.S.”
I seem to recall reading an article (and I will look for it again) that argued that enforceable diaspora tax systems would be a bonanza for developing countries and could go a long way toward getting rid of their reliance on foreign aid. Something tells me that this is NOT what countries of immigration like the US have in mind when it defends its own system of citizenship-based taxation. Would be a bit ironic, wouldn’t it, if the US efforts led to its being bitten on its own arse. Just imagine their surprise if, say, Mexico, decided to do as their northern neighbor does….:-)