Politics

Is America’s FATCA Policy To Recover Lost Taxes “Skewed”?

America’s policy of recovering undisclosed taxes has been slammed as “skewed” by the boss of one of the world’s largest independent financial advisory organizations.

deVere Group founder and chief executive, Nigel Green, is speaking out after reports reveal that a major retail corporation owns more than $76 billion of assets in overseas tax havens.

FATCA: Overseas Americans required to report directly to the IRS

Mr Green affirms:  “Since July 1 last year, when the highly controversial Foreign Account Tax Compliance Act – better known as FATCA – came into effect, millions of ordinary American citizens who happen to live and/or work overseas have been required to report their private financial information directly to the IRS.

“The idea behind FATCA is, purportedly, to catch tax evaders.

“Unsurprisingly, the vast majority of the 7.6 million Americans abroad, don’t owe any tax and are not suspected of any wrongdoing.  However, the financial information must still be reported in a lengthy, burdensome and costly process nonetheless – just on the off chance some hidden offshore assets are found along the way.

“Tax evasion is a serious global problem and all attempts must be sought to stamp it out.  Yet FATCA’s extremely expensive ‘dragnet’ approach is highly ineffective and not the answer.”

He continues: “It seems nonsensical and skewed that middle-income, law abiding Americans who happen to live and/or work outside U.S. borders have to jump through hoops to prove that they are not in fact tax cheats, where major corporations – which, like individuals, are also mostly not accused of owing tax or suspected of any wrongdoing – are not under the same scrutiny.  Where is the logic?”

Nigel Green has been a high-profile critic of FATCA since it was first mooted and has recently won an award for his campaign to have it repealed.

He says it is “fatally flawed”, explaining: “FATCA gives us a masterclass in the law of unintended consequences.

FATCA’s burdensome regulations

“Americans overseas are now routinely rejected from foreign financial institutions, such as banks in their country of residence, because FATCA’s costly and burdensome regulations mean they are now typically deemed more trouble than they are worth.  They have become financial pariahs.

“In addition, U.S. firms which operate in international markets as well as in the U.S. are now often branded with a leprosy-like status. Of course, this can only be detrimental to America’s global competitiveness, and could, as such, seriously and negatively affect American jobs and the long-term growth of the economy.”

He adds: “Questions should be asked about the imperialist characteristics of FATCA.  Governments and foreign financial institutions have been coerced into complying with its expensive, onerous, privacy-infringing, sovereignty-violating regulations by the U.S. – or face heavy penalties and the prospect of being effectively frozen out of U.S. markets.”

Last month, Mr Green called on U.S. presidential candidates to “come clean” on where they stand on the issue of FATCA.

“FATCA adversely affects millions of hardworking, middle class Americans around the world, plus U.S. companies that operate internationally – and, therefore, it impacts U.S. jobs and the American economy.

“Presidential candidates who support this tax act now need to justify to America why they support it; whilst those who want it repealed now need to articulate to voters why they believe it is fundamentally flawed and why they will move to repeal it.

“It is an issue that must play a major part in the national conversation ahead of the election.”

About deVere Group

deVere Group is one of the world’s largest independent advisors of specialist global financial solutions to international, local mass affluent, and high-net-worth clients.  It has a network of more than 70 offices across the world, over 80,000 clients and $10bn under advisement.

www.devere-group.com

Is America's FATCA Policy To Recover Lost Taxes "Skewed"?

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  • Jim Duncakf

    i am reminded of the story of the fronter farmer in the old west, whose large wheat field was invaded by a heard of bison and some chickens. Fearful of the large bison he sat out to deal with the chickens. After killing a few chickens the heard of bison spooked and trampled him to death. Which brings up the question, Why does the FATCA not apply to the US corporation’s 2.1 trillions in off shore accounts or their untold trillions in foreign assets? I recently formed a local corporation and am banking with an Asian bank. Us chickens have to put on some bison fir.

  • DoubleTaxed

    Time For America to Join the Rest of The Developed World and Adopt: Residence Based Taxation.

    Americans in the US trumpet how great their freedom is. However the freedom of Americans is inferior to the freedom enjoyed by citizens of many countries such as Australia, Canada, and the UK and this freedom is this: the freedom to work and live in another country, and the freedom to leave one’s country.

    America’s tax and compliance laws have increasingly acted to keep Americans in by punishing harshly those who have left.

    Those impacted very much are part of the 99%, most part of the lower and middle class. If you are a US person living overseas, and there are 7+ million, then you are already getting taxed in the country where you live and receive government services. You receive $0 in US government services, other then those paid for on a fee basis.

    The US with Citizenship Based Taxation wants to tax you as if you live in the US. The US allows tax credits for your taxes paid in your country of residence. The conundrum comes in where the US has taxes that your country does not, then this flows on top of all taxes paid as double taxation. A more technical term for this is ‘tax treaty gaps.’ Most US persons already live in relatively high tax countries such as Australia, Canada, and the UK, and the US taxes representing double taxation get put on top; so these people pay way higher total tax than US persons with the same income living in the US.

    US persons living overseas are tremendously disadvantaged by US tax and compliance policies.

    All other countries of the OECD practice Residence Based Taxation. As a result while US persons overseas are tripped up by double taxation, reporting all their accounts, and onerous compliance and penalties; nationals from all other countries are free from such interference from their home countries.

    Any US persons living overseas caught up in all this – which very much includes taxation without representation, an American founding principle that the US government has ignored for US citizens abroad – must visit the message boards of The Isaac Brock Society, whose motto is: Liberty and Justice for all United States Persons Abroad. ADCS has initiated legal action against the Canadian FATCA IGA and is seeking donations in its fight against US government injustices against US persons overseas – check it out on The Isaac Brock Website: www dot isaacbrocksociety dot ca

  • DoubleTaxed

    Time For America to Join the Rest of The Developed World and Adopt: Residence Based Taxation.

    Americans in the US trumpet how great their freedom is. However the freedom of Americans is inferior to the freedom enjoyed by citizens of many countries such as Australia, Canada, and the UK and this freedom is this: the freedom to work and live in another country, and the freedom to leave one’s country.

    America’s tax and compliance laws have increasingly acted to keep Americans in by punishing harshly those who have left.

    Those impacted very much are part of the 99%, most part of the lower and middle class. If you are a US person living overseas, and there are 7.6+ million, then you are already getting taxed in the country where you live and receive government services. You receive $0 in US government services, other then those paid for on a fee basis.

    The US with Citizenship Based Taxation wants to tax you as if you live in the US. The US allows tax credits for your taxes paid in your country of residence. The conundrum comes in where the US has taxes that your country does not, then this flows on top of all taxes paid as double taxation. A more technical term for this is ‘tax treaty gaps.’ Most US persons already live in relatively high tax countries such as Australia, Canada, and the UK, and the US taxes representing double taxation get put on top; so these people pay way higher total tax than US persons with the same income living in the US.

    US persons living overseas are tremendously disadvantaged by US tax and compliance policies. US citizenship is supposed to be about advantage.

    All other countries of the OECD practice Residence Based Taxation. As a result while US persons overseas are tripped up by double taxation, reporting all their accounts, and onerous compliance and penalties; nationals from all other countries are free from such interference from their home countries.

    Any US persons living overseas caught up in all this – which very much includes taxation without representation, an American founding principle that the US government has ignored for US citizens abroad – must visit the message boards of The Isaac Brock Society, whose motto is: Liberty and Justice for all United States Persons Abroad. ADCS has initiated legal action against the Canadian FATCA IGA and is seeking donations in its fight against US government injustices against US persons overseas – check it out on The Isaac Brock Website: http://isaacbrocksociety.ca/