As the rest of the world is forced to deal with imperialist US tax policy, Americans and the US economy are continuing to suffer the consequences. We’ve already written about how FATCA is causing Americans being dropped from banks in Switzerland, Taiwanese banks reducing their American holdings, and even how some are fighting back. Now we’ve received reports that Thai banks are limiting services to US persons, which the news has confirmed:
The Foreign Account Tax Compliance Act (Fatca) requires US taxpayers holding foreign financial assets with an aggregate value exceeding US$50,000 to report the information on their annual tax return. But it also requires foreign financial institutions to report certain information to the US Internal Revenue Service (IRS) about financial accounts held by US taxpayers or by foreign entities in which US taxpayers hold a substantial ownership interest.
Thai financial institutions are only starting to realise how the law will affect them, which features a 30% withholding tax on payments to non-US persons or entities that do not comply with Fatca.
“In typical fashion, US lawmakers used a sledgehammer when a flyswatter would have done,” said Eric Roose, a Tokyo lawyer and owner of the Firehouse eatery on Sukhumvit Soi 11.
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As the regulations have not been finalised yet, many banks are reluctant to act and are still gathering information, said Mr Blaine. Kasikorn Asset Management and TMB Asset Management have both decided not to offer their mutual funds to Americans. While no Thai banks have shut their doors to Americans, expats in Europe and other parts of Asia have not been so lucky.
“I know an American physician who had been in Saudi Arabia for a long time who just had his account closed out in Singapore,” said Doug Harrison, the owner of Bourbon Street Restaurant on Soi Ekamai. “This new law is a real pain in the neck. It’s just too intrusive.”
Let this be a lesson. This is what happens when significant legislation is rammed through Congress without a single hearing or word uttered in debate, without any thought given to cost or consequence. But folks are now waking up and speaking out. And with the new year marking another missed deadline for the Treasury Department to offer final rules, it’s time for banks that have been scrambling to comply with not-yet-written rules to realize that they should stop wasting their time and money. If even a fraction of the resources used to comply with unconscionable US dictates was used to fight them instead, we could have overturned this destructive law already.
January 15, 2013 at 6:45 am
A very serious concern for Americans living in “less than stable” countries is that FATCA will require that they be identified by foreign banks as an American citizen. Michael Young, an opinion editor for the Lebanon Daily Star, describes this concern in a December 2012 editorial called “FATCA’s Security Problem”(excerpt):
“However, there is one aspect of FATCA that has not been sufficiently examined, but that remains potentially hazardous. The American government is effectively asking foreign institutions to prepare detailed data bases of American citizens, with no guidelines explaining how this information must be protected. For a country obsessed with the security of its citizens in the aftermath of the 9/11 attacks, such behavior is paradoxical, indeed astonishing.
Foreign financial institutions will effectively become vast repositories of information on Americans–including what they earn, the sources of their income, what they spend, where they live, who their family members are, and so on. In their zeal to implicitly label Americans living abroad as tax cheats requiring monitoring, the sponsors of FATCA have shown utter indifference to the safety of their citizens.
In some countries, the American authorities are well aware that their enemies have ready access to financial institutions. The Lebanese Canadian Bank scandal, in which bank managers were accused of helping Hezbollah launder money, showed that this was true in Lebanon. What is to prevent anti-American groups elsewhere from gaining access to data on American citizens, and possibly using this to their advantage? FATCA helps make it eminently possible.
Strangely, we have heard nothing about FATCA from the State Department, which is responsible for Americans overseas. At a time when American embassies regularly issue advisories to citizens to guarantee their safety, we are seeing the IRS asking institutions abroad to gather the most sensitive facts on Americans, with no oversight. The irresponsibility is breathtaking. Worse, because FATCA imposes pariah status on Americans abroad, whatever rightful protest they have against the legislation will sound suspicious.”
As one of the 6.3 million Americans living abroad who does not wish to be identified to terrorist, kidnapping and extortionist groups, I implore the Federal government to stop this FATCA insanity.
January 29, 2013 at 7:38 am
Fed has lost all ideas, seems completely cash strapped. U.S.A wants money by all means. then a freak FATCA idea came up and they have ultimately pushed it. The bottom line is economics scores over legitimate claims safety & security. Similarly wealthy Americans living abroad may renounce citizenship if they have to pay excess taxes if they have dual citizenship. Others may stop investing abroad. Too many repercussions…
February 4, 2013 at 2:19 pm
More here:
FATCA IGAs exposed as bad deal for partner countries