New US FACTA law. A MUST READ for Americans overseas.

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Post by eurobrat »

Rock wrote:I don't think that mere residency will exempt you from the restrictions on accounts owned by Americans. The bank will still report your account to the Feds.

I think that to avoid being reported, you will need to give them a foreign passport, which is usually (not always) based on citizenship. That way the bank "never knew" you were American.
Success yesterday with only giving them minimal information and no SS number. ID with passport and residency is all they wanted.

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Post by Yohan »

It is very interesting to read how restricted US-citizens are, not only in their own country, but even when living abroad. Such a tax-collection system worldwide is unique, and is unknown anywhere else. We have bilateral agreements between EU-countries and Japan, and you report and pay for taxes either - or, but never to both sides. Usually, except people owning their own business, these tax-reports are done by the employer or by the company paying out the retirement allowances.

About being born in USA and holding dual citizenship for example Germany and USA, it should be mentioned that while you are living in Germany the German authorities will consider you as a German national and will never consider you as US-citizen.

This is not only true about banking account, but also about other issues, for example, a dual citizen will never need a working permit, or will be restricted to buy land etc. etc.

This rule applies to every country I know, if you have the citizenship of USA (or any other foreign citizenship) and you live in a country where you also holding a citizenship, you will be considered as a local of that country and not as a foreigner. In case of dual citizenship the citizenship of the country where you are actually living prevails.
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Post by Yohan »

Contrarian Expatriate wrote:Just had my first negative FATCA encounter yesterday while cashing in my matured foreign CD. The bank asked me to complete and sign a FATCA form which asks for my IRS Taxpayer ID (which is the Social Security Number for most).

I told the clerk that I never give that number out, especially to a foreign institution. She stated that after I withdrew the money from her bank, my account would have to be blocked so I could no longer bank there unless I provide the number.
This goes so far that some banks in various countries are now refusing to open any banking account for foreigners who identify themselves as US-citizens even if they are willing to co-operate and to offer any required information about their social security number.

Sorry, we do not accept US-citizens, too risky. This motto is not unknown here in Japan, too. Smaller banks are worried their branch office in USA might get fined in case of any problem. US laws are never really clear and legal fees to defend yourself as a foreign company are the highest in the world.

Final result in future: Sorry, no US customers accepted outside of the USA, too much paperwork and too risky.
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Post by Jester »

Rock wrote:
The problem is, US person expats have a disadvantage relative to expats from other developed nations when working and investing in third countries. Cus latter do not have to pay any tax to their home governments the way US persons do. As I mentioned, many countries do not tax on investment gains and incomes at all. An non-US person expat can generate those types of monies tax free whereas the US person will have to pay tax on them back to his home government.

Likewise, a high salaried expat in HK will pay just 15% on his earned income to HK Inland Revenue and be done whereas his US person expat counterpart working same job and earning same amount will not only pay 15% to HK but will also have to pay some tax on portion of his income which exceeds expat earned income and housing exclusion.

At the net level, US person expat usually makes a lot less than equal (at gross level) non-US person expat in following cases: 1. money is made through investing as opposed to earning; 2. earned income is in a high enough bracket to significantly exceed the sum of earned income exclusion + housing allowance for US expats.

If you don't generate significant investment gains and/or incomes or you are a 5 figure man, it really makes little if any difference whether or not you are a US person.
Actually you have to pay 15 percent SEI tax from dollar one, if self-employed. Applies to expats too. This is the one ball and chain you cant avoid if earning online income abroad.
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