Tick, Tick, Tick - US Now Collaborating with 50+ Countries to Retrieve Financial Data on US Expats

By Horace Reichart

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Summary: The United States Treasury Department is now actively working with more than 50 nations to share Americans' personal financial data that will reveal who is tax compliant, including American expats living overseas.

Tick, Tick, Tick - US Now Collaborating with 50+ Countries to Retrieve Financial Data on US Expats

The United States Treasury Department is now actively working with more than 50 nations to share Americans' personal financial data that will reveal who is tax compliant, including American expats living overseas. The effort is in support of new FATCA (Foreign Account Tax Compliance Act) laws that require foreign financial entities to report Americans' account information to US authorities and to undertake mandatory withholding from them to assure compliance with American income tax laws.

The trade-off is that the United States will reciprocate with the data of partner countries' own citizens with accounts in the States. The laws have been rolling out in varying levels since its enactment in 2010. The US has principal agreements with the 5 big sovereigns of Europe, including the United Kingdom, Germany, France, Spain and Italy, and has signed a "model agreement" with the United Kingdom.

The inception of, roll out and implementation of FATCA has been clever, if not masterful on the part of the US Treasury. The United States enacted FATCA and began by leaning, mostly, on foreign financial entities and mandating that they comply with certain new rules, including reporting of data on American clients and withholding of monies, to ensure Americans were compliant with US tax laws. Foreign financial interests, in turn, desperately sought relief from their own governments. The US mandates were burdensome and cost prohibitive for them to implement. The solution for financiers was for their own governments, many of whom already have the data the US wants to take on the sharing requirement that the US, using its global financial clout, is forcing on everyone.

50+ countries in all are clamoring to get on board. In part because of the controversial nature of FATCA itself. Foreign financial entities are pleading with their own governments to facilitate the newly required reporting that the US laws mandate. For many, it is impossible to continue doing business with American clients and are closing their accounts. Additionally, foreign banks and investment houses who do not comply face a 30% withholding on their own transactions that occur within the US, so there's no way to opt-out.

The US Treasury expects to finalize signed data sharing agreements by the end of the year with countries that include Norway, the Netherlands, Mexico, Jersey, Ireland, Isle of Man, Guernsey, Finland, Denmark, Canada, Switzerland, Japan, Spain, Germany, Italy and France.

Treasury is actively negotiating with the following countries to finalize and enact data sharing agreements – Sweden, Singapore, Slovak Republic, New Zealand, Malta, Malaysia, Liechtenstein, Korea, Israel, Hungary, Estonia, Cyprus, Cayman Islands, Belgium, Australia and Argentina. Their goal is to conclude agreements with as many as possible by year's end.

The list goes on – The US Treasury is reaching out to and actively attempting to engage the following countries to agree to data sharing as well – South Africa, Slovenia, Sint Maarten, Seychelles, Russia, Romania, Luxembourg, Lebanon, India, Gibraltar, Czech Republic, Chile, British Virgin islands, Brazil and Bermuda.

Assistant Secretary of the US Treasury, Mark Mazur, in a public statement said, "Global cooperation is critical to implementing FATCA in a way that is targeted and efficient. By working cooperatively with foreign governments and financial institutions, we are intensifying our ability to combat tax evasion while minimizing burdens on financial institutions."

About the Author

With clients in over 25 countries worldwide, Bright!Tax is the go-to cloud based US income tax preparation firm most sought after by the 6 million Americans who are living abroad. US expat tax. All CPAs. Fanatical support. Secure. Precise. Guaranteed.

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Comments about this Article

guest
Jan 14, 2013 13:58

Great news for those U.S. law abiding citizens who pay their taxes!

LesFant
Jan 19, 2013 04:19

Because of U.S. regulations including but not limited to FATCA, U.S. expats are having problems with banking, reporting, investment, certain types of financial employment, marital issues with non-U.S. spouses and more. Giving up U.S. citizenship is increasingly under consideration by some expats. It's possible to relinquish citizenship immediately without embassy-caused delays. For confidential and comprehensive counseling on expatriation, check out Expatriation Copesthesia Consultants. www.expatriationcopesthesia.com

xizang
Feb 7, 2013 12:10

While I understand the US's need for revenue to support its huge spending habits, as a Libertarian I must ask, who does the money you earn belong to - you or the government? And if you've moved to another country and are participating there in that country's economy, how much do you morally owe the country you moved from? Did your ancestors continue to pay taxes to the European countries they moved from when they immigrated to the USA?

Adnor
Jun 6, 2014 00:47

We are American expats and this is our second year using Bright!Tax. Indeed, they are everything they advertise and more. "Fanatical support" , courteous, professional, efficient and prompt; all these qualities, further enhanced by very reasonable and competitive rates. No question was too small or too big for them, and the accountant we've been working with ( Poornima Mathure) always answered our questions promptly. I highly recommend Bright!Tax to all American expats. Ronda

guest
Jun 6, 2014 00:49

We are American expats and this is our second year using Bright!Tax. Indeed, they are everything they advertise and more. "Fanatical support" , courteous, professional, efficient and prompt; all these qualities, further enhanced by very reasonable and competitive rates. No question was too small or too big for them, and the accountant we've been working with ( Poornima Mathure) always answered our questions promptly. I highly recommend Bright!Tax to all American expats. Ronda

First Published: Jan 11, 2013

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