Do I understand that US financial institutions DO NOT report non-us person deposits in them?

Educate

Trusted Member
Business Angel
US is the only country that has not signed CRS (common reporting standard) agreement. They collect info via FACTA, but they do not have a responsibility to share info on non-US person deposits in their financial institutions with the respective tax authorities of the non-US person country.

Do I understand this correctly? Yes, they will share upon request, but not on their own.

So for now it seems US has cleverly formed itself into a sort of a tax haven?
 

Dubsize

Building Trust
Entrepreneur
You understand perfectly.
the U.S.A are today the biggest tax heaven on earth. However, be careful, the situation could change fast...
It can also be seen as a trap, attracting many people and then implementing tax for offshore parties...
 

diablo

Banned User
BANNED MEMBER
Business Angel
US is the only country that has not signed CRS (common reporting standard) agreement. They collect info via FACTA, but they do not have a responsibility to share info on non-US person deposits in their financial institutions with the respective tax authorities of the non-US person country.

Do I understand this correctly? Yes, they will share upon request, but not on their own.

So for now it seems US has cleverly formed itself into a sort of a tax haven?
Yes you are right and that's why they opened up for all the Black Money that is floating into the USA - however, will you trust all your money to them?
 

jryan54

Building Trust
Entrepreneur
This is another reason why Peter Schiff's EuroPacific Bank is moving domicile to Puerto Rico. They have never taken U.S. Citizens anyway because of FATCA and with the move from SVG they will be basically avoiding the CRS requirements.
 

Martin Everson

Offshore Consultant
Business Angel
Just to correct this wrong assertion, FATCA is actually a bilateral agreement with information exchanged in both directions on an automatic basis under certain conditions i.e non-US account holder with US account receives more than $10 in interest in any calendar year. Have a read of a FATCA agreement. That's why US never joined CRS as they already have FATCA and CRS is just a duplication of effort on OECD terms.

Puerto Rico is best AVOIDED, they have had around 22 new banks registered in just the last 2 years. That's a near on 50% increase in banks in Puerto Rico with only one purpose - to avoid CRS and launder money. This makes Puerto Rico one giant bullseye for the OECD and to be blacklisted at short notice. Puerto Rico also has very suspicious Valenzuela controlled banks used to get access to direct Fedwire USD clearing via the backdoor. For Euro Pacific bank to move there and advertise openly on their website that your account will not be reported under CRS makes it obvious they are a dirty money bank and best avoided before an FBME saga starts again.

btw full list of countries that are part of CRS and not part of CRS in below document from OECD. There are 41 other countries you can still bank that have not yet given a date for AEOI.

https://www.oecd.org/tax/transparency/AEOI-commitments.pdf

P.S This is just opinion and not tax advice.
 

Milky Moon

Offshore Research & Development.
Business Angel
Just to correct this wrong assertion, FATCA is actually a bilateral agreement with information exchanged in both directions on an automatic basis under certain conditions i.e non-US account holder with US account receives more than $10 in interest in any calendar year.
Correct. So, when you have a current account with 0% interest .. no automatic reporting. (as it happens most account do NOT give you interest)
 

Martin Everson

Offshore Consultant
Business Angel
Right, but doesn't FACTA exchange UPON REQUEST?
It'a automatic. Lets take for example the FATCA bilateral agreement with UK

https://www.treasury.gov/resource-center/tax-policy/treaties/Documents/FATCA-Agreement-UK-9-12-2012.pdf

Under Article 1 - CC

"The term “United Kingdom Reportable Account” means a Financial Account maintained by a Reporting U.S. Financial Institution if: (i) in the case of a Depository Account, the account is held by an individual resident in the United Kingdom and more than $10 of interest is paid to such account in any given calendar year;"

Article 2 states

"Subject to the provisions of Article 3, each Party shall obtain the information specified in paragraph 2 of this Article with respect to all Reportable Accounts and shall annually exchange this information with the other Party on an AUTOMATIC basis pursuant to the provisions of Article 27 of the Convention."

Article 3 explains the time and manor of the exchange. I won't summarize here.
 

Martin Everson

Offshore Consultant
Business Angel
btw

"The term “Depository Account” includes any commercial, checking, savings, time, or thrift account, or an account that is evidenced by a certificate of deposit, thrift certificate, investment certificate, certificate of indebtedness, or other similar instrument maintained by a Financial Institution in the ordinary course of a banking or similar business. A Depository Account also generally includes an amount held by an insurance company under an agreement to pay or credit interest thereon."
 

Educate

Trusted Member
Business Angel
Does it include stock broker accounts and crypto currency exchanges such as GDAX, Kraken, etc...?
 

Martin Everson

Offshore Consultant
Business Angel
I must add if anyone reads the below documents notes section. It makes clear about US position

https://www.oecd.org/tax/transparency/AEOI-commitments.pdf

Extract...

"1 The United States has undertaken automatic information exchanges pursuant to FATCA from 2015 and entered into intergovernmental agreements (IGAs) with other jurisdictions to do so. The Model 1A IGAs entered into by the United States acknowledge the need for the United States to achieve equivalent levels of reciprocal automatic information exchange with partner jurisdictions. They also include a political commitment to pursue the adoption of regulations and to advocate and support relevant legislation to achieve such equivalent levels of reciprocal automatic exchange."

In fact American Express card information based in US is being shared to catch tax cheats in Europe using Amex cards.......FACT!!.
 

Educate

Trusted Member
Business Angel
Express card yes, but what about stock brokers, for example? What if an EU citizen deposits funds from offshore account into USA based stock broker and purchases stocks. Will broker report this information and holdings to EU respective country? And according to which treaty?

What about crypto exchanges like Coinbase?
 

Martin Everson

Offshore Consultant
Business Angel
Any FI (Financial Institution) in America can be requested to provide information and that includes stock brokers. It has been this way for ages since DTA's (Double taxation Agreement) were signed - read them. Today the US is allowing John Doe summons from EU states like those against American Express.

Remember the same way the US can chase a EU FI is the same way the EU country can also.

Remember what happened to ABLV a few weeks back when US went after it collapsed overnight.

Europe to Wind Down Latvian Bank Targeted by U.S. Over Sanctions
 

Educate

Trusted Member
Business Angel
I'm not talking about being requested to provide in formation. I'm talking to providing information with no request as in accordance to CRS, AEOI?

If EU citizen keeps his funds / stocks in Coinbase or American stock broker like Interactive brokers will USA report this at end of year to citizens governing authority or will they ONLY do this if requested?
 

Martin Everson

Offshore Consultant
Business Angel
I'm not talking about being requested to provide in formation. I'm talking to providing information with no request as in accordance to CRS, AEOI?

If EU citizen keeps his funds / stocks in Coinbase or American stock broker like Interactive brokers will USA report this at end of year to citizens governing authority or will they ONLY do this if requested?
CRS is not all that is out there for automatic information exchange of information. It is just one standard for doing so. FATCA is another standard for example. Both are bilateral and allow automatic of information in both directions. There are also others.

Btw Interactive Brokers USA forces you to open an account through Interactive Brokers UK if you are resident in EU. IB US has no licence to operate or provide financial services in EU hence they operate via IB UK. Same goes for Charles Schwab US which has Charles Schwab UK etc etc etc. Basically US financial service companies cannot offer services to EU citizens. They can only do so via a EU regulated subsidiary. Any broker doing otherwise is breaking EU law unless client account is opened via reverse solicitation.
 

Educate

Trusted Member
Business Angel
CRS is not all that is out there for automatic information exchange of information. It is just one standard for doing so. FATCA is another standard for example. Both are bilateral and allow automatic of information in both directions. There are also others.

Btw Interactive Brokers USA forces you to open an account through Interactive Brokers UK if you are resident in EU. IB US has no licence to operate or provide financial services in EU hence they operate via IB UK. Same goes for Charles Schwab US which has Charles Schwab UK etc etc etc. Basically US financial service companies cannot offer services to EU citizens. They can only do so via a EU regulated subsidiary. Any broker doing otherwise is breaking EU law unless client account is opened via reverse solicitation.
Ok, can you show the document of FACTA and precise paragraph which states what information is AUTOMATICALLY exchanged at end of year. Where is this said?
 

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