If you are an American expat and looking for somewhere out of reach of the Internal Revenue Service (IRS) and Foreign Account Tax Compliance Act (FATCA)A, then the choice of destinations is shrinking.
So many nations are queuing to sign up to FATCA, the US Treasury agreed a six-month delay in implementing the law from January 1, 2014 until July 1, 2014 to allow the paperwork to catch-up.
FATCA – Country list
Here are three lists of countries that have signed FATCA treaties or are in the throes of discussing the finer details with the US:
Signed
UK
France
Germany
Italy
Spain
Japan
Switzerland
Canada
Denmark
Finland
Guernsey
Ireland
Isle of Man
Jersey
Mexico
The Netherlands
Norway
In Active Dialogue
Argentina
Australia
Austria
Belgium
The Cayman Islands
Cyprus
Estonia
Hungary
Israel
Liechtenstein
Malaysia
Malta
New Zealand
Portugal
Slovak Republic
Singapore
South Korea
Sweden.
Discussing options for intergovernmental co-operation
Barbados
Bermuda
Brazil
British Virgin Islands
Chile
The Czech Republic
Gibraltar
India
Isle of Man
Jamaica
Lebanon
Luxembourg
Qatar
Romania
Russia
Seychelles
Saint Maarten
Slovenia
South Africa
Taiwan
The Philippines
United Arab Emirates
The lists come from government sources and statements – but may not be a complete list of all nations in the FATCA network, while some may move up the lists as negotiations progress.
FATCA explained
FATCA requires foreign financial institutions and US taxpayers with overseas holdings valued at $50,000 or more to report the details to the IRS.
To reciprocate, US financial institutions will send details of other nationals with accounts in the States to their respective governments.
In effect, tax rules have not changed – governments are just tightening up the loose ends to make sure taxpayers who have failed to declare income or capital gains report the details to their tax authority.
FATCA is a carrot and stick legislation for foreign financial institutions, like banks and investment funds, that penalises them with a US withholding tax on 30% of all financial transactions taking place in the States if they fail to comply with FATCA rules.
Despite opposition in Congress and from US expats, FATCA seems destined to come into force in most of the world’s major financial centres.
The big doubt is whether China will join the network. The nation has little to gain, as the government does not tax the overseas assets or incomes of nationals.
The holes in the FATCA map of the world are in Asia, Africa and Latin America.
Canada has not signed and has a lot of issues with FATCA. Most Canadians object to the U.S. exporting its laws over the border especially since FATCA violates Canada’s Charter of Rights and Freedoms. Even if they DO sign when the rest of the general public here finds out what FATCA really is and what it will really do to millions of people here, there will be a very big problem with law suits ensuing very quickly. The first time a bank asks any Canadian “where were you born” or alters services or discloses information based on place of birth that bank is then in violation of Canadian laws so Canada is going to have a very big problem on its hands if the government is finally bullied into going along with this by the U.S. After all it is a U.S. law, not a Canadian one and despite what the U.S. thinks it cannot just make a law then tell the rest of the world to follow it or else. On paper this is what they have done disrespecting sovereignty everywhere. Most people don’t know about the effect of that yet but, they will and when they do, this is going to cause nothing but, trouble.
Lisa Smith ….. you are an IDIOT !!!!!
This has been a very useful information. Thank you! 🙂