“Knowledge is power – and to be the best you can possibly be you need to constantly learn, even if people think you are stupid or foolish”
FATCA good or bad, you decide
This week Switzerland’s oldest bank closed. Last week Taiwan refused to give the US information. Ireland said it will comply with US rules. The World is spending billions on complying with US legalization. Is FATCA good or bad?
Here’s an update on the latest.
Switzerland’s oldest bank, Wegelin & Co., was founded in 1741 and embarked on a storied history. But in 2013, it admitted helping hide $1.2 billion for American tax cheats.It’s the first foreign bank to plead guilty to U.S. tax charges, and now it’s closing.
With branches only in Switzerland, Wegelin claimed it was bound only by Swiss banking laws. Yet it capitulated and pleaded guilty. Even Wegelin’s plea and death knell leaves loose ends, though, including former executives Michael Berlinka, Urs Frei and Roger Keller who failed to appear in U.S. court and were labeled fugitives.
Taiwan is currently refusing to supply the US information. A government official last week said Taiwan’s government has no obligation to meet tax-reporting requirements under Washington’s 2010 Foreign Account Tax Compliance Act (FATCA) until it has signed a tax information exchange agreement with the United States.
They added, it is not necessary for the local government to help Washington to facilitate the enforcement of the FATCA. It is a matter of sovereignty.
Ireland signed a deal last week with the US to implement its Foreign Account Tax Compliance Act , an agreement Irish Finance Minister Michael Noonan says will significantly increase the amount of tax information automatically exchanged between the two countries.
Www.iexpats.com this week reported thatJames Jatras, a former US Diplomat and US Senate staffer, who now runs a legal firm in Washington D.C which specialises in foreign affairs and human rights, has launched a worldwide campaign for FATCA to be repealed.
Personally I agree if tax is due it must be paid. I do however think that this act which is costing the world far more than the tax it will generate is a stage too far. US expats are suffering as a result, not because they will have to pay tax, but rather because FATCA implementation is so expensive to implement that most financial institutions will simply refuse to deal with Americans. There certainly are some Swiss banks that wish they had avoided Americans already.
Should the US force FATCA on the world? I’d love to hear your comments?
Nigel Green deVere Group
blog written 5th of January