EU Parliament study on FATCA and non-resident taxation

The EU Parliament has done a fantastic study on the harms caused by FATCA and CBT, including breaching the rights of duals and accidentals, and problems with non-reciprocity and conflict with GDPR: http://www.europarl.europa.eu/RegData/etudes/STUD/2018/604967/IPOL_STU(2018)604967_EN.pdf

It might be a good idea for everyone to send this document to their MP and encourage them to act and to support the upcoming EU resolution on this, expected in July.

We could be close to seeing the end of the FATCA / CBT nightmare. Thanks everybody for making an effort toward this

PS it is also covered today by The American Mag: http://theamerican.co.uk/pr/ne-FATCA-may-violate-EU-GDPR-laws.php

We could be close to seeing the end of the FATCA / CBT nightmare. Thanks everybody for making an effort toward this

Do you really think it has a chance of happening, seems to good to be true?

Yes, I think the transition tax and GDPR are bringing this to a crisis point, not to mention fatca/CBT repeal being in the republican platform and congress already implementing territorial tax for companies. Canadian and French MPs are on the attack. Something has got to give and there is more support now for ending CBT than there has ever been before. All Americans overseas should be fighting to end it and pushing our representatives to take action. At the moment, American-born people are being discriminated against and forced to renounce under duress and at great expense which is completely unjust and unacceptable.

This afternoon, at 17:00 PM UK time, an hour long debate was held in the French Senate concerning the plight of the Accidental Americans as a result of FATCA. The (French) Senate unanimously adopted the motion for a resolution pursuant to Article 34-1 of the Constitution.

The Government of France will now consider the following:
 -Their (Accidental Americans) right to the bank account;
 -The guarantee of the end of the differences of treatment by the French banks;
 -Reciprocity in the implementation of the bilateral FATCA agreement;
 -Informing the French living in the United States of the tax consequences attached to their expatriation;
 -The implementation of diplomatic action to obtain treatment for "accidental Americans" allowing them either to renounce US citizenship through a simple and free procedure, or to be exempted from US tax obligations;
 -Reciprocal application of the Franco-American agreement of 14 November 2013.

Full reciprocity as defined in the IGA is mentioned twice.

http://www.senat.fr/espace_presse/actualites/201805/americains_accidentels_concernes_par_le_fatca.html#c640282
(Sorry, it's in French)

Last night, I read the link supplied in the OP regarding the study commissioned by the EU Parliament. In addition to much we already understand, the study included cost estimates for the implementation of FATCA.

KPMG estimate globally the cost was/is US$30 billion. An article in Forbes estimates the cost annually at US$8 billion and US$200 billion total globally.

The study concludes that the EU financial sector represents at least 33% of the global cost, so going by KPMG, US$10 billion total cost to the EU; and by Forbes, US$2.6 annual and a total of US$67 billion cost to the EU. That's a fair amount of money spent in the EU which benefits the US only (US$800 million/year US estimate), and no full reciprocity as agreed in the IGAs. (Page 23 of the OP link.)

Combined with other recent global actions coming from Washington appearing to be less than popular in the EU, it isn't surprising there might be a bit of kick back in Brussels, Paris, London, etc.

 

 

Thanks OAP. Very exciting developments for us emerged from France yesterday. The French accidental Americans group is incredible and this is all down to their very hard work. It would be brilliant to start a similar UK group. Our own foreign secretary is an accidental so I don’t understand why there hasn’t been more movement on it here.



 

-The implementation of diplomatic action to obtain treatment for "accidental Americans" allowing them either to renounce US citizenship through a simple and free procedure, or to be exempted from US tax obligations;

Can you explain exactly what that means in layman's terms?

Can you explain exactly what that means in layman's terms?

No, I cannot give an accurate interpretation of what the Senate proposes; the above is my feeble attempt at a translation of the following:

http://www.senat.fr/espace_presse/actualites/201805/americains_accidentels_concernes_par_le_fatca.html#c640266

Under: "Comprendre les enjeux", and further, "Une proposition de résolution pour appeler le Gouvernement à agir".

I believe you may have some experience of France, and would welcome any interpretation/translation per your understanding.

But, IMO, it means discussing the situation with the American bureaucracy (Congress). The request would be to allow Accidental Americans to renounce USC without paying the $2,350 fee and not be subject to reporting 5 years of past tax returns (Residence Based Taxation, or as a non-resident). Based on past conversations with Washington by the Canadians, the US answer would likely be F off ("Congress has spoken").

Presently, there is also another delegation from Canada attempting to discuss the ramifications of the Transition Tax/GILTI with the US.

There is also an April 2018 petition from the EU. (We've linked the Commission's debate in other posts which led to this petition. It was prompted, I believe, by the member of AA France at the Commission debate.)

http://www.emeeting.europarl.europa.eu/committees/download.do?docUrl=http%3A%2F%2Fwww.europarl.europa.eu%2Fmeetdocs%2F2014_2019%2Fplmrep%2FCOMMITTEES%2FPETI%2FRE%2F2018%2F05-16%2F1151349EN.pdf

Two relevant proposals from the petition:

"7. Regrets the inherent lack of reciprocity of IGAs signed by Member States, especially in terms of the scope of information to be exchanged, which is larger for Member States than it is for the United States; Calls on the Member States who signed a Model 1 (A or B) FATCA agreement with the US to consider collectively suspending the application of their IGAs until full reciprocal exchange of financial account information is provided by the United States"; [Bold mine]

"9. Calls on the Council to mandate the Commission to open negotiations with the United States of an EU-US FATCA agreement, with a view to ensure full reciprocal exchange of information and to uphold the fundamental principles of EU law as well as the Payment Accounts Directive, and allow EU “accidental Americans” to relinquish their unwanted US citizenship on a no fees, no filing, no penalties basis;" [Bold mine]



 

I believe you may have some experience of France, and would welcome any interpretation/translation per your understanding.

Only my wife would understand the French but she would have no idea what it was about.  Best to wait for a French person who knows something about this

to allow Accidental Americans to renounce USC without paying the $2,350 fee and not be subject to reporting 5 years of past tax returns (Residence Based Taxation, or as a non-resident).

This would be so nice, but I may have to become French.  Not sure which is worse. 

@theOAP - The $2,350 fee is not a result of Congress, but the State Department.

I've mentioned this before at the Isaac Brock blog, but an idea I have to maybe get the U.S. to change its ways is to implement a "reciprocal tax" - tax their citizens living in the U.S. the same way that the U.S. taxes its citizens living in their country. That will show the U.S. what it's like to have their money siphoned to another country via CBT. Same thing with FACTA, renunciation fees, etc.

Kelly, yes I agree. All international agreements must be fully reciprocal. I hope that’s what France and EU and Canada will be demanding from the US. The US can stop their nonsense or else be subject to the same thing they’re subjecting other countries to. Their choice. But no more of this one way rubbish.

Everybody who has and is writing to their MP is helping to bring about action from the UK. We shouldn’t rely on the French and Canadians to fight this battle for us. Thanks to everyone who has been working hard at this.

I’m tired of the UK allowing this hypocrisy from the US. It is depletes Britain’s tax base and contravenes British principles of justice, fairness and sovereignty. We shouldn’t stand for it.