Scrap Transition Tax, Demand US Expat Campaigners

2421

US expats are piling the pressure on in Washington to persuade politicians to vote to reject a tax on backing small businesses abroad.

In a rare demonstration of co-operation, The Republicans Overseas and Democrats Abroad have linked with other expat groups to push home the protest.

The tax they want to abolish was introduced in January as a ‘transition tax’ within President Donald Trump’s Tax Cuts & Jobs Act 2017.

The measure taxes certain profits made by Americans holding a stake of 10% or more in a business abroad at 17.5%.

Double taxation for expats

The Republicans Overseas handed out 2,750 petitionsto senators and congressmen demanding a stay on collecting the transition tax, as well as changes in how American expats are taxed.

Expat groups want a ‘territorial’ tax system in America that does not raise money from non-residents to stop expats paying tax in the country where they live and the US as well.

The Republicans want a delay in enforcing the transition tax while lawmakers draft another bill to switch to territorial taxation and repeal the current measures.

“The argument is particularly compelling for delaying the implementation of the transition tax, due to the extreme burden, cost and difficulty for American expatriates who are now expected to comply with it, since it currently obliges them to pay the first of eight instalments of the tax they owe by April 15,” said a spokesman for The Republicans Overseas.

President Trump’s flagship bill

“This ignores the fact to comply, expats will be expected to provide financial statements and retained earnings for their overseas businesses back to 1986 according to US accounting standards, which are different from those applied worldwide.”

Besides the Republicans Overseas and Democrats Abroad, other expat group supporting the campaign to scrap the transition tax include the Association of Americans Resident Overseas, the American Citizens Abroad, Accidental Americans, Americans for Tax Reform.

The Tax Cuts & Jobs Actis one of President Trump’s flagship bills aimed at simplifying the tax code and cutting red tape and tax bills for businesses. The clause catching expat investors was designed to catch multinational corporations moving their money offshore to avoid tax.

Download the Free Pension Transfer Guide

Expat Pension Transfers Guide

iExpats.com expert writers have created a simple guide to Expat Pension Transfers just for you.

Find out how you could save tax, increase growth and investment opportunities with this simple, no-nonsense guide that will introduce QROPS, SIPPs and QNUPS options and talk through the pros and cons. Download the free guide by following the link below

2 COMMENTS

  1. The U.S. has built a virtual Financial Berlin Wall to keep U.S. persons in by punishing harshly those who have left – even those gone decades. FATCA is part of this new Berlin Wall.

    JFK famously said in Berlin ‘we don’t need to build walls to keep our people in.’ Fast forward to the present day, and the US has done precisely that. U.S. tax and compliance laws apply Kafkaesque double taxation with the U.S. tax code assuming all U.S. persons are tax residents of the U.S. (even those who live overseas and comply and pay tax to their countries of residence), with extra U.S. penalties, restrictions, and disincentives for money, accounts, pensions, and investments in countries other than the US; even if you live permanently overseas and your accounts are local to you.

    In an increasingly global and mobile world the US should not punish US persons living, working overseas, and expanding US influence and trade overseas.

    Once resident overseas one does not receive U.S. government services provided to U.S. residents such as roads, unemployment, food stamps, etc. So there are no services in exchange for the double taxation. Thus the double tax claim is one-way, unjustified, and un-American.

    The US should join the OECD and adopt Residence Based Taxation. To align the terminology in Congress in regards to tax reform for U.S. companies and U.S. persons, Republicans Overseas is advocating for “territorial taxation” for INDIVIDUALS. Companies already have this.

    Any U.S. persons overseas caught up in this must visit the message boards of The Isaac Brock Society, purpleexpatorg, Facebook Citizenship Based Taxation and American Expatriates Groups, citizenshiptaxation dot ca, and FixTheTaxTreaty dot org

  2. A change is necessary. British husbands have begun to pressure their wives to give up their US passports and put their marital homes in the name of the British husband. This is leaving many American wives feeling very insecure. Also instances of husbands insisting that their wives who have small businesses go into voluntary bankruptcy.

Leave a Reply