The new American tax dictate FATCA comes into force

[Kablooie]

Americans avoiding US taxes and stashing cash abroad are in trouble from July 1, when a new law forces institutions hiding money to report on their clients. The law will make business with Americans harder, but the US hopes it will raise billions.

The US Foreign Account Tax Compliance Act, or FATCA, comes into force on July 1 and requires foreign banks to hand over data on clients to the US International Revenue Service (IRS). If a bank does not report such information, it could be subject to a 30 percent withholding tax.

FATCA legislation, signed into law in 2010, requires overseas financial institutions to identify their American customers to the IRS. The law applies to any account with more than $50,000.

Since legislation was made public in 2010, hundreds of millionaires and billionaires have voluntarily renounced their citizenship, opting for more tax-friendly countries to call ‘home’.

In 2013, a record 2,999 Americans renounced their citizenship, according to a figure Bloomberg News reported.

Tina Turner famously gave up her US passport to become a Swiss citizen, but said it wasn’t related to paying taxes on her $200 million fortune.

Giving up her US citizenship will reduce the paperwork headache, and now she will no longer have to pay taxes both in Switzerland, where she has lived for 20 years, and in the US.

Facebook co-founder and billionaire Eduardo Saverin has also ditched his US passport since FATCA legislation was introduced.

http://rt.com/business/169316-fatca-american-tax-law/

---

From Nikkan Gendai, Japan

The dollar's collapse is near. Such rumors are flowing through the Japanese stock market.

On July 1 it seems there is a possibility that some measures related to tax havens may be implemented, and some multimillionaires may quickly sell off a large amount of their dollars.

"If such a thing happens, there will be an extreme weakening in the dollar-yen exchange ratio. At the worst, the yen could climb 30 percent in value, which would mean a postwar value high of $1 to 75.32 yen," says a market participant.

This could mean a stock market collapse. The previous dollar-yen postwar high was in Oct. 2011, when the Nikkei average was around 8,800 yen. The Nikkei could plunge to that level.

http://watchingamerica.com/News/241409/tremors-in-the-japanese-financial-market-the-july-dollar-collapse-theory/

---

NOTE:
I added the Japanese article not because I believe that the dollar will crash, I don't.
It's just to show some of the effect this law is having on rich world financiers.
It's scaring them to death.

[mindem]

1. It is impossible for me to look at that

without adding a t to the end of FATCA. Fat-cat would work too, I guess.

[xfundy]

2. Same here!

[Yo_Mama_Been_Loggin]

3. Maybe it was deliberate.

[Frustratedlady]

4. That was exactly what I thought.

It needs to be called that from now on...at least on DU.

[davidpdx]

5. These types of articles get posted over and over again and some people miss the point that not ALL

of the people renouncing citizenship are doing it to hide money. Unfortunately the law applies to expatriates who live overseas. The filing requirements are so complex that in most cases expatriates have to have their taxes prepared by an expert. The fines for making a mistake can be extremely costly.

Keep in mind, this is NOT a tax issues. Many of us live in countries with tax treaties and only pay taxes on what we earn in the country in which we live. I pay taxes in South Korea on what I earn from my employer here.

Questions exist as to whether the law applies to spouses who are not American citizens.

See my recent post: THE GOOD, THE BAD AND THE UGLY! (FATCA Update)
http://www.democraticunderground.com/1009167

IRS:

If you are a taxpayer living abroad you must file if:
You are filing a return other than a joint return and the total value of your specified foreign assets is more than $200,000 on the last day of the tax year or more than $300,000 at any time during the year; or
You are filing a joint return and the value of your specified foreign asset is more than $400,000 on the last day of the tax year or more than $600,000 at any time during the year.

http://www.irs.gov/Businesses/Corporations/Do-I-need-to-file-Form-8938,-%E2%80%9CStatement-of-Specified-Foreign-Financial-Assets%E2%80%9D%3F