FATCA to Roll-out Globally

Photo – Steve Johnson

We previously reported on the US FATCA tax law and the effects it has on American’s lives U.S. Expats Frustrated with Taxes, Giving Up Citizenship.

The unpleasant effects of the US Foreign Account Tax Compliance Act (FATCA) are being felt by expats, but now it seems the legislation is making life even more difficult for American citizens living abroad.

FATCA requires American citizens, including Americans living outside of the US, to report their financial accounts held outside of the United States. The act also requires foreign financial institutions or banks to report to the Internal Revenue Service (IRS) about their American clients.

The Activist Post recently reported that American’s are increasingly being denied bank accounts at foreign financial institutions. The bottom line is that international banks are unwilling to track and report data to the IRS as FATCA requires.

However, it seems that American’s may not be the only expats to suffer from government tax collection agencies. The UK and Russia are apparently following in the USA’s footsteps and are drawing up their own versions of FATCA, reported The Dollar Vigilante.

The Guardian reported that the UK government plans to crack down on UK’s offshore tax havens and will base their legislation on the US FATCA. The “UK FATCA” will require British citizens and financial institutions to report their assets to the HM Revenue and Customs (HMRC) if they are within crown dependencies such as Jersey, Guernsey and the Isle of Man, as well as its overseas territories, such as the Cayman Islands. The HMRC has also recently been given power to seize money directly from tax debtors’ bank accounts.

Russia’s Ministry of Finance (Minfin) recently announced amendments to their Tax Code relating to the taxation of foreign companies controlled by tax residents of Russia, reported FTSE Global Markets. Minfin plans to tackle “de-offshoring”, which means that Russian controlled companies based in the “ministry’s list of countries that it deems offers preferential tax treatment towards company income” will now fit into a higher tax code. The ministry also wants to introduce a penalty of up to 20% of understated income in addition to the levy of a 20% tax on income received by Russian tax residents from foreign companies controlled by them.

While the UK and Russian version of FATCA do not seem as restrictive as the US legislation; it does seem that the FATCA “pinch” will soon be felt by all expats. Government agencies are falling in line with the US and tracking their nationals’ assets globally. For this reason alone, tax law is something to consider carefully when you start and register a company in Thailand, being informed on your legal options of how to structure your business and protect your assets has never been more important.

Read the full articles:

US Citizen? No Foreign Bank Account For You
Governments Worldwide Adopting FATCA Style Legislation
Treasury to Crack Down on UK’s Offshore Tax Havens
‘UK FATCA’ – the disclosure to HMRC of information about reportable accounts held by UK taxpayers in the Crown Dependencies and Overseas Territories
Russia drafts its own version of FATCA

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Related Articles:

The US FATCA: “The Neutron Bomb of the Global Financial System”
U.S. Expats Frustrated with Taxes, Giving Up Citizenship
FATCA: Where Does Thailand Stand?