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U.S. offshore tax evaders beware: FATCA starts July 1


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Why is it taking them so long to implement this policy? Don’t worry someone will come up with some new somehow.

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Governments concerned with tax evasion should spend more time reforming their tax codes, and cutting taxes. Very few, if any, governments in the developed world can honestly say they don't collect enough taxes.

While I don't feel sorry for millionaires who have tax problems, I wouldn't admonish them or anyone else for trying to keep more money. Taxation is especially problematic for salaried workers, who governments tax much more aggressively.

Tax havens aren't a problem. Governments will reckless tax codes (which would include many countries) are taking much needed money out of the economy, and wasting it, compounding economic woes with high deficit spending. We need more tax havens, not a crackdown on them.

1 ( +1 / -0 )

Gogogo and Strangerland, "most" taxes paid to one side are removed from the other side, but only ある程度 (to use the official language). Hence, you will be exposed to dual taxation (but only "a certain amount") because shame on you for being successful and all that. And the highest personal income tax rate is going to 55% next year, which will cause a huge exodus of people from Japan, anyone who has the choice of leaving.

1 ( +1 / -0 )

Aren't there any Russian or Chinese banks in Japan? and thats why theres been a few high profile celebritites who have giving up there citizenship to become Russian, take rate on the wealthy much lower there. im no fan of Putin but thank god the Russians have as many bombs as the US, the US has to negotiate with them and not dictate what they want to happen

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You guys want fun? Try running a business in the U.S. while being a tax resident of Japan. Yeah, that's some real fun. The shenanigans I've been exposed to have forced me to move up my retirements date by at least ten years. Among the joys you get are, the inability to make 401(k) contributions to my company's IRA because "Japanese people save too much" so **** you, and I also can't make the charitable contributions I want because local San Diego organizations don't happen to be on the short list of approved organizations Japan allows. They also allow (some) dual taxation, because anyone who has succeeded in business in Japan (also known as "being the nail that sticks up straight, needing to be hammered back down") is seen in a very negative light in Japan.

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There are two reporting procedures. 1. The overseas bank 2. The individual tax payer For the US-Japan memorandum, banks must identify those who's assets are over 50,000 USD.

How does the bank know who is a US citizen? I don't remember filling out a question when I opened my bank account saying "what country are you a resident off?" or are they reporting ANY and all accounts over 50,000 USD? or only people with foreign names? How do they know what to "share"?

-1 ( +1 / -2 )

this wont effect the big tax evaders, theyll just give up there American citizenship or move the money to countries that dont have any agreements with the US. the biggest tax evaders are large US corporations,

eg in 2011 Google avoided $2 billion in worldwide income by shifting $9.8 billion in revenues into a Bermuda shell company. By legally funneling profits from overseas subsidiaries into Bermuda, which doesn’t have a corporate income tax, Google cut its overall tax rate almost in half. The amount moved to Bermuda is equivalent to about 80 percent of Google’s total pretax profit in 2011.

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This article is incomplete; if you live abroad, your bank must only report on you if you have **$200,000 or more

There are two reporting procedures.

The overseas bank The individual tax payer

For the US-Japan memorandum, banks must identify those who's assets are over 50,000 USD.

For individual reporting, if you are a bonafide resident, then you fill out a form if it is over 200,000 USD.

There's a third element known as FBAR, which has been in effect since 1970, which requires tax payer to fill out an FBAR if their accounts exceed 10,000 USD.

The main purpose of FATCA is not about individuals reporting, but rather forcing banks to reveal US indivudal accounts so they (the IRS) can check if the US individuals have been reporting properly.

1 ( +1 / -0 )

America the land which used to be about freedom. Founders like Madison were clear one of the primary steps to tyranny is confiscation of the money and resources of the individual. Marx was clear to be Communist the government must control financial institutions and confiscate money from the individual. The political class of America seems to be ignoring Madison's constitution in favor of some of Marx's planks

2 ( +3 / -1 )

This article is incomplete; if you live abroad, your bank must only report on you if you have $200,000 or more (and double that if the taxpayer is married and filing jointly):

"Reporting thresholds vary based on whether you file a joint income tax return or live abroad. If you are single or file separately from your spouse, you must submit a Form 8938 if you have more than $200,000 of specified foreign financial assets at the end of the year and you live abroad; or more than $50,000, if you live in the United States."

2 ( +2 / -0 )

The noose tightens on the people from the land of the free, now they finding they aint so free, freedom costs, and Obama wants to be paid for it.

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This law is a disaster for the US. Once banks stop accept US currency deposits- the currency will stop being a worldwide currency- foreign creditors are going to demand payment for US loans in their own currency. Then the whole house of cards that supports the US government unsustainable debt gathering is going to fall apart.

2 ( +2 / -0 )

Foreign earned income is non-US taxable. It must be declared but it is not taxable. When did all this change?

-3 ( +0 / -3 )

Aren't there any Russian or Chinese banks in Japan?

I'm sure they wouldn't comply with this.

1 ( +1 / -0 )

If my bank gave up my banking info to the US government without my permission I'd sue them. -Strangerland

Wouldn't this go against the current Japanese privacy laws? -tokyoguy719

And it'll be tossed out by a Japanese court, they have no option. -Badge213

The reason you would be very unlikely to succeed in suing is that your Japanese bank has most likely changed the terms of your bank contract by sending you something informing you that if you are a US citizen they will share your data and if you object to this you should come to close your account before July 1st. The courts will say it's not a violation of your privacy if you consent to it. Also, Some banks in other countries who don't want any of the hassle have responded by simply closing accounts for all US citizens. It's caused alot of hardships for Americans when trying to open overseas accounts.

(However, the FACTA agreement between Japan and the US could not be relied on in a Japanese court as a defence to violating privacy laws because it, like any other treaty, doesn't form part of binding domestic law in Japan. The agreement is really more of a courtesy between both countries.)

The reason the US has so much power over global banks is because they will bar access to the US market for any banks that don't comply.

1 ( +1 / -0 )

Wouldn't this go against the current Japanese privacy laws?

That's the least of the IRS' concerns.

Considering how broke Japan is, I expect it to head down a similar path, rather than enacting necessary reforms and growth promoting legislation.

Glad I'm a citizen of neither but alas I am a resident of one of them...

1 ( +1 / -0 )

If my bank gave up my banking info to the US government without my permission I'd sue them.

And it'll be tossed out by a Japanese court, they have no option.

Any case, if you read the FATCA agreement, those who do not wish to divulge their information then you will be subject to a 30% withholding tax.

Note that FATCA applies to those with $50,000 USD in assets. In addition, FBAR, which has been in place since 1970 requires you to report any assets in banks totaling 10,000 USD or higher. That's been in place for over 40 years.

Also I suggest people read FATCA agreement and see how banks are to identify US individuals. Essentially a database search to see if you have any US transactions. Harder to track if you didn't use your residence card to open an account (I always use my health insurance card). Harder if you had accounts established before FATCA.

1 ( +1 / -0 )

Wouldn't this go against the current Japanese privacy laws?

0 ( +0 / -0 )

Strangerland: What a rip off, glad I'm not a US citizen :)

-1 ( +1 / -2 )

Do US citizens have to pay US (based) tax on income that has already been taxed overseas?

Yes, on anything over the base amount ($93k or something like that). It's double taxation.

2 ( +2 / -0 )

Do US citizens have to pay US (based) tax on income that has already been taxed overseas?

-1 ( +1 / -2 )

If my bank gave up my banking info to the US government without my permission I'd sue them.

And this whole thing seems like as good a reason to give up US citizenship as anything.

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I wonder how this will affect the big companies like Apple, who has about 90% of its cash in tax havens like Ireland? I know that the US govt has been fighting to get this cash on US soil for years...

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Yeah the Yanks living overseas who make over the limit are being severely ripped off.

BUT the other Yanks(& others) hiding funds overseas when they live in the US are what they are also after I would think & I hope they catch those scumbags.

Don't get me started on how apple etc have been scamming tax authorities all over the place they also need to hammered & HARD.

AND while I am at it, how about here in Japan the tax authorities go after the 70+% of companies that year after year pay NO TAXES, that's where the $$$$ is at!!

1 ( +1 / -0 )

The thing that bothers me the most about this is that the US would be better off fixing its corporate tax system instead of going after a small percentage of people who hold offshore accounts and putting foreign banks out of business. The real crime is that companies can employ large accounting sectors to write off millions (if not billions) in taxes each year.

3 ( +3 / -0 )

Retirement funds, pension plans etc are exempt from FATCA.

I urge any American to read JAPAN-US FATCA agreements and see if applies to them:

2 ( +2 / -0 )

The IRS sucks as most people know. Nothing but a bunch of crooks in ties. There is a reason that they are hated and this is just another reason why. As a US Citizen who has lived in Japan for more than 20 years, you have no right to any money I make at all. You want to go after foreign companies that hide their assests to avoid taxation, then lower corporate tax to a rate that is competive to other countries, then you will not have so many companies with foreign bank accounts. As for us private citizens, keep your gruby theiving hands to yourselves. We make that money ourselves without anything from you at all. Whatever help I get never comes from the US government at all, it comes from the Japanese government so you are not entitled to anything at all as far as I am concerned. When someone used my social security number to pay thier taxes 18 years ago, what did do you do? You sent me a bill and then threatened me. I didnt even live in the country at the time and you could not even accept that! When you realized the mistake, not because of the work that you did, but the work I did, did you apologize or pay me back for my phone bill or the time that I spent trying to prove my innocence? HECK NO! I pay taxes here. I pay my medical insurance, HERE. I pay social security, HERE. Everything is HERE. The US government does not help me at all. And even if I were rich you have no business knowing how much money I make anyway. None of your business at all. No wonder corporations are leaving the USA and people overseas are disowning their own country.

7 ( +7 / -0 )

The reason that the US wants a list of bank balances for every American citizen is because the US is one of only two countries in the world that taxes its non-resident citizens living outside of the US on money earned abroad. The only other country to do this is Eritrea, one of the poorest countries in Africa. Every other country in the world has a territorial tax system where only income earned within the country or the foreign income of those who are currently resident in the country is taxed.

An example is illustrative for those unfamiliar with how this works:

An American moves to Japan and starts working. They save their Japanese earnings in a Japanese bank for their retirement. They have lived in Japan for 20 years and have never been back to the US. Under the US tax law, the interest that they earn on their Japanese earnings, at a Japanese Bank, in Japan, is taxable income in the US based on the fact that they hold a US passport. The only consolation is that there is an allowance of $97000 or so per year on foreign income. Furthermore, the Japanese bank will be barred from doing business in America if they don't turn over a list of bank balances to the US authorities every year.

Canadians and Brits living abroad on the other hand, never have to file a tax return or submit their bank balances or report anything to their governments if they have no income from Canadian/British sources. They are considered non-residents and the government couldn't care less how much interest or income they were earning abroad.

Again, no other country except one of the poorest countries in Africa, and the land of the free have this type of draconian system. I feel very sorry for all of those American's out there, good luck opening bank accounts around the world.

7 ( +8 / -1 )

I've read the FATCA agreement between the US and Japan (obtainable from the IRS website). For Japan, Japanese banks will need to identify account holders who's assets are over $50,000 USD. Insurance/pensions etc are exempted.

Note that this is in addition to the already existing laws requiring US persons to report to the IRS any bank accounts with an aggregate value of over $10,000 USD.

2 ( +2 / -0 )

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