Trustees of UK charities have no worries about the upcoming US FATCA tax laws unless they have holdings in the States.
Most charities are automatically FATCA compliant providing the meet Charity Commission qualifying rules in Britain.
Only charities with holdings in the US need to take action – which involves filing a Form W8 to certify that they are the UK equivalent of a US non-profit organisation.
Charities registered outside the UK need to check that they do not fall foul of their home nation’s FATCA agreement with the US Treasury – this will apply to international charities with branches in several countries.
If a charity trustee is a US citizen and signatory to a UK charity bank account, they may have to clarify this on their personal tax filing.
FATCA is the Foreign Account Tax Compliance Act that ramps up in 2014.
US expats must declare their foreign earnings and holdings that exceed $50,000 to the US Internal Revenue Service to ensure they do not avoid paying tax on income or gains.
Foreign financial institutions, like banks, investment funds and financial services companies must also make an annual return detailing the financial status of any accounts held by US nationals or face a 30% withholding tax on their revenues in the US.
Canadian FATCA opposition
An open letter protesting about applying FATCA to US expats in Canada has gone to the Canadian Bankers Association from lobbyists the Isaac Brock Society and Maple Sandbox.
The groups wrote: “We implore the Canadian Bankers Association to use its considerable influence and resources to insist that the Canadian government categorically reject Washington’s demands and to lobby for FATCA’s repeal by the American Congress.”
The protesters consider FATCA a violation of rights guaranteed by law to Canadian citizens.
“Asking Canadians where they were born or about other citizenship violates Canada’s banking, privacy and human rights laws,” Lynne Swanson, spokesperson for Maple Sandbox. “Changing those laws would violate Canada’s Charter of Rights and Freedoms.”
The organisations claim 12% of Canada’s population would be adversely affected by FATCA.
France signs up to FATCA
The US Treasury and French government have announced the signing of an intergovernmental FATCA agreement.
Singapore FATCA talks
US Treasury and Singapore government officials have met to discuss signing a FATCA agreement.
The Singapore government issued a statement confirming talks are ‘progressing well’ and both countries expect to sign an agreement soon.
