tag:blogger.com,1999:blog-4622776924781844427.post4449657462570716770..comments2024-03-23T13:43:27.051-04:00Comments on Tax, Society & Culture: U.S., U.K. sign FATCA pactAllisonhttp://www.blogger.com/profile/16733465339926078146noreply@blogger.comBlogger6125tag:blogger.com,1999:blog-4622776924781844427.post-29729427855308309522012-09-18T18:14:42.341-04:002012-09-18T18:14:42.341-04:00Deputy Assistant Secretary Corwin to Travel to Eur...Deputy Assistant Secretary Corwin to Travel to Europe, Asia, September 17-28 to Discuss FATCA Implementation <br /><br />http://www.treasury.gov/press-center/media-advisories/Pages/09172012B.aspx<br /><br />No visit to Canada though. Interesting. In Canada there would be people on Parliament Hill and in front L'Esplanade Laurier(home of the Department of Finance) protesting. I might see if a few contacts of mine in Paris want to hold signs in front of the OECD.Timhttps://www.blogger.com/profile/03894651289037073128noreply@blogger.comtag:blogger.com,1999:blog-4622776924781844427.post-83500281602813848152012-09-18T17:26:39.872-04:002012-09-18T17:26:39.872-04:00The very unofficial idea I have heard is that Cana...The very unofficial idea I have heard is that Canada would guarantee the top marginal rate of income tax would never fall below 70% of that in the US and in turn the US would eliminate FATCA and the tax filing requirements for US citizens living in Canada. In some ways that would be an even greater loss of soveriegnty for Canada but in reality the the top marginal rate of tax in Canada is NEVER going below 70% of that of the US(In Alberta though it might get closer than many people on either side of the border expect over the next few years). It would be akin to the Auto Pact where Canada essentially gave up its own auto industry(which was never really going to be all that internationally significant) in return for getting a guaranteed share of the combined continental industry and from a tax perspective the policy of the US having its citizens even those born in the fifty states who live in the insular posessions/territories such as Puerto Rico and USVI pay income tax only and directly to those territories. This idea is pretty radical though and goes beyond just about any existing form of international tax cooperation between soveriegn nations. My guess is if such an agreement was attempted it would ONLY be between the US and Canada(Notwithstanding the fact that quite a few nations have a top marginal rate higher than the US). You also really acknowledge that the eventually endgame of international tax cooperation is some form of cooridination of rates.<br /><br />After reading the interpetation of the aggreement last night given by HMRC and HM Treasury it quite clearly indicates that the UK would be entitled to "better" terms given to any other "FATCA" Partner. In the scenario you would be taking about a pretty radical and pretty unrealistic change in US tax policy. I only bring up this scenario in that I think some of the lack of communication coming out of Ottawa has to with the fact that Canada does not want to be seen as hurting efforts by the US to crackdown on tax cheats and tax havens. In my proposed scenario the US would guaranteed basically that Canada would maintain a relatively similar system of income tax to that the US and would not become a tax haven. (Of course you still have differences that have to be papered over vis a vis Estate Tax vs Deemed Sale and different cap gains issues)Timhttps://www.blogger.com/profile/03894651289037073128noreply@blogger.comtag:blogger.com,1999:blog-4622776924781844427.post-47462847366938293132012-09-17T22:46:51.318-04:002012-09-17T22:46:51.318-04:00that's interesting, there haven't traditio...that's interesting, there haven't traditionally been a lot of MFNs in US tax treaties (though there are some in U.S. social security totalization agreements--odd, that). How would the US give better terms to Canada, do you reckon.Allisonhttps://www.blogger.com/profile/16733465339926078146noreply@blogger.comtag:blogger.com,1999:blog-4622776924781844427.post-66972919063808514382012-09-17T22:45:32.571-04:002012-09-17T22:45:32.571-04:00interesting indeed:
"It will:
1. For the fi...interesting indeed:<br /><br />"It will: <br />1. For the first time put the interpretation of the United States Internal Code into UK domestic law to be enforced by UK courts <br />2. Be enforced by a tough penalty regime to be included in the UKs 2013 Finance Act <br />3. Lack true reciprocity so that while the UK will send millions of bits of data to America every year, the US will send very little data back to the UK <br />4. Require every American citizen or green card holder living in the UK to think much, much more seriously about whether all of the complicated forms that the IRS already require every year are being filed. <br />5. Make UK financial institutions much more scared of having any US persons as account holders at all because of both their extra compliance costs as well as the risk of recommending banking and investment products that are not “US tax friendly”. <br /><br />David Treitel predicts that the most likely outcome is that mattress sales in the UK will increase dramatically - as the half million or so Americans in the UK quickly lose the ability to bank anywhere. David’s company American Tax Returns Ltd specialises in this complex area and is available immediately either to test mattresses or instead advise on US tax, FATCA and the consequences."Allisonhttps://www.blogger.com/profile/16733465339926078146noreply@blogger.comtag:blogger.com,1999:blog-4622776924781844427.post-35428556709491579302012-09-17T19:30:54.999-04:002012-09-17T19:30:54.999-04:00Additionally if you read the UK US Agreement there...Additionally if you read the UK US Agreement there is a MFN clause which basically says that if the US gives "better" terms to another country then the UK is entitled to those same terms too. However if you really read it closely there might still be a way lets for the US to give Canada better terms than the UK. This is as they say very "new" area of international tax law. Timhttps://www.blogger.com/profile/03894651289037073128noreply@blogger.comtag:blogger.com,1999:blog-4622776924781844427.post-74022804044896201952012-09-17T11:23:35.293-04:002012-09-17T11:23:35.293-04:00There was a good comment on Linkedin about this ag...There was a good comment on Linkedin about this agreement.<br /><br />http://www.linkedin.com/groups/UKUS-agreement-strengthens-UK-ability-3731046.S.163810460?qid=c22ad4a5-a220-4094-8042-7b9874211749&trk=group_most_popular-0-b-cmr&goback=%2Egmp_3731046<br /><br />Mattress sales will rise dramatically in the UK. Timhttps://www.blogger.com/profile/03894651289037073128noreply@blogger.com