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

Martin Everson

Offshore Consultant
Business Angel
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?
No problem

Article 2 of the FATCA agreement i.e UK/US FATCA agreement (Same for all EU agreements with US)

https://www.treasury.gov/resource-c...es/Documents/FATCA-Agreement-UK-9-12-2012.pdf

It states

"1. 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."

The whole discussion we had on another thread a while ago btw.

Euro Pacific Bank EPB vs uphold.com
 

Educate

Trusted Member
Business Angel
No problem

Article 2 of the FATCA agreement i.e UK/US FATCA agreement (Same for all EU agreements with US)

https://www.treasury.gov/resource-c...es/Documents/FATCA-Agreement-UK-9-12-2012.pdf

It states

"1. 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."

The whole discussion we had on another thread a while ago btw.

Euro Pacific Bank EPB vs uphold.com
That is an agreement between US and UK. What about other countries? Where is list of all of these agreements?
 

redvern

New Member
@Educate. No problem

Below is a list of all FATCA agreements.

It is basically a cut and paste template (i.e "Model 1 agreement") the US used for most countries. Feel free to find your own country if it has Model 1 against it then its same as UK with names changed which is 99% of countries.

Foreign Account Tax Compliance Act (FATCA)
I know this is an old post but I have a more technical question. I've asked my US brokerage firm if they share anything with foreign tax authorities and they've said no. They only share info with the IRS. So the only way my home country(a 3rd world shithole) can know about my account is through the IRS.

But, I have filled a form while opening my account and declared that I'm a "non-resident alien" to the IRS. So I only pay witholding tax for dividends and certain types of interest. Capital gains of non-resident aliens aren't taxed in US. I don't even need to fill the form required for that an inform the IRS. I've never had any dividend payments made to me, I mostly trade options.

So how can my resident country can know about this and make me pay capital gains taxes? IRS doesn't know it either as I've stated why.
 

Educate

Trusted Member
Business Angel
I know this is an old post but I have a more technical question. I've asked my US brokerage firm if they share anything with foreign tax authorities and they've said no. They only share info with the IRS. So the only way my home country(a 3rd world shithole) can know about my account is through the IRS.

But, I have filled a form while opening my account and declared that I'm a "non-resident alien" to the IRS. So I only pay witholding tax for dividends and certain types of interest. Capital gains of non-resident aliens aren't taxed in US. I don't even need to fill the form required for that an inform the IRS. I've never had any dividend payments made to me, I mostly trade options.

So how can my resident country can know about this and make me pay capital gains taxes? IRS doesn't know it either as I've stated why.
I think true irony here is that USA effectively remains the one true offshore legislation where the whole world can hide their assets. USA doesn't do reporting automatically unless requested.
 

Martin Everson

Offshore Consultant
Business Angel
So how can my resident country can know about this and make me pay capital gains taxes? IRS doesn't know it either as I've stated why.
People never learn :rolleyes:. The IRS is already automatically sending the reciprocal FATCA information to 34 countries it deems credible like I said and more countries are being added ns2. FATCA is bilateral like I said and just because people don't hear the horror stories it does not mean people have not already been caught who have accounts in U.S :(. In your case depending on the country you live in they may just send details on the existence of a brokerage account. It will then be down to your sh*thole as to whether it will pursue you personally for more information on that account, secretly monitor you or just ignore the data if they got sent it. Tax authorities can investigate and watch you for years before taking action.

IRS Begins Sending Individual Account Information to Foreign Countries

----quote
Updated Oct. 2, 2015 10:27 p.m. ET

"The Internal Revenue Service has kicked off a new program under which it shares large amounts of individuals’ financial-account information with certain foreign countries, the agency said Friday.

The IRS said it received digital information about U.S. taxpayers’ foreign accounts from governments and firms around the world, and it sent information on foreigners’ U.S. accounts to government authorities in as many as 34 countries. While governments have exchanged such information in the past, the sharing wasn’t automatic and the scope was often far narrower. The deadline for the exchange to begin was Sept. 30.

According to the IRS, it will only share information with foreign countries which meet its “stringent safeguard, privacy, and technical standards,” and it has the ability to halt transmissions if it believes the standards aren’t being met.

The IRS declined to say which countries received information from the U.S. This week, the agency added 16 new countries, including Brazil, South Africa and India, to the list of those already eligible to receive financial-account details.

The information exchanged typically includes the name, address, tax identification number, account number, account balance, and dividend and interest payments, among other things. This disclosure applies to accounts above a certain threshold."


Countries eligible to receive information from the IRS about their taxpayers’ U.S. accounts:

  • Australia
  • Brazil
  • Canada
  • Czech Republic
  • Denmark
  • Estonia
  • Finland
  • France
  • Germany
  • Gibraltar
  • Guernsey
  • Hungary
  • Iceland
  • India
  • Ireland
  • Isle of Man
  • Italy
  • Jersey
  • Latvia
  • Liechtenstein
  • Lithuania
  • Luxembourg
  • Malta
  • Mauritius
  • Mexico
  • Netherlands
  • New Zealand
  • Norway
  • Poland
  • Slovenia
  • South Africa
  • Spain
  • Sweden
  • United Kingdom
--- end quote
 

redvern

New Member
People never learn :rolleyes:. The IRS is already automatically sending the reciprocal FATCA information to 34 countries it deems credible like I said and more countries are being added ns2. FATCA is bilateral like I said and just because people don't hear the horror stories it does not mean people have not already been caught who have accounts in U.S :(. In your case depending on the country you live in they may just send details on the existence of a brokerage account. It will then be down to your sh*thole as to whether it will pursue you personally for more information on that account, secretly monitor you or just ignore the data if they got sent it. Tax authorities can investigate and watch you for years before taking action.

IRS Begins Sending Individual Account Information to Foreign Countries

----quote
Updated Oct. 2, 2015 10:27 p.m. ET

"The Internal Revenue Service has kicked off a new program under which it shares large amounts of individuals’ financial-account information with certain foreign countries, the agency said Friday.

The IRS said it received digital information about U.S. taxpayers’ foreign accounts from governments and firms around the world, and it sent information on foreigners’ U.S. accounts to government authorities in as many as 34 countries. While governments have exchanged such information in the past, the sharing wasn’t automatic and the scope was often far narrower. The deadline for the exchange to begin was Sept. 30.

According to the IRS, it will only share information with foreign countries which meet its “stringent safeguard, privacy, and technical standards,” and it has the ability to halt transmissions if it believes the standards aren’t being met.

The IRS declined to say which countries received information from the U.S. This week, the agency added 16 new countries, including Brazil, South Africa and India, to the list of those already eligible to receive financial-account details.

The information exchanged typically includes the name, address, tax identification number, account number, account balance, and dividend and interest payments, among other things. This disclosure applies to accounts above a certain threshold."


Countries eligible to receive information from the IRS about their taxpayers’ U.S. accounts:

  • Australia
  • Brazil
  • Canada
  • Czech Republic
  • Denmark
  • Estonia
  • Finland
  • France
  • Germany
  • Gibraltar
  • Guernsey
  • Hungary
  • Iceland
  • India
  • Ireland
  • Isle of Man
  • Italy
  • Jersey
  • Latvia
  • Liechtenstein
  • Lithuania
  • Luxembourg
  • Malta
  • Mauritius
  • Mexico
  • Netherlands
  • New Zealand
  • Norway
  • Poland
  • Slovenia
  • South Africa
  • Spain
  • Sweden
  • United Kingdom
--- end quote
yes but this is not the answer to my question. Even if the local tax authority learns that I have an account at a US based brokerage firm (I highly doubt it), how will they know the amount of capital taxes I should pay back home? As I've said I do not need to declare that amount to the IRS as non-resident aliens are exempt from paying it. Only witholding tax.

Btw there won't be a horror story, I will pay the tax that I should have paid in the beginning by declaring my world wide income. If they don't request I'm not gonna pay.
 

KJK

Building Trust
Entrepreneur
I think true irony here is that USA effectively remains the one true offshore legislation where the whole world can hide their assets. USA doesn't do reporting automatically unless requested.
¨
Possibly... The darkest place is under the candlestick
A similar situation can evolve pretty soon if UK leaves the European Union - not that they wouldn't share info and cooperate but they may be more "offshore friendly" then the rest of Europe thanks to brexit.

However please don't think that just because some exchange doesn't happen automatically, it cannot happen manually by request or even automatically by accident.
 

Martin Everson

Offshore Consultant
Business Angel
Even if the local tax authority learns that I have an account at a US based brokerage firm (I highly doubt it), how will they know the amount of capital taxes I should pay back home?
For the record the U.S broker and IRS do not decide how much tax you owe in your home country to the taxman. Why should a U.S broker need to know the amount of capital gains taxes you would owe in your home country? In plain English the U.S has nothing to do with the tax system in your home country beyond adhering to any DTA...lol. It is on you to calculate how much you would owe according to your local tax laws and whether you can deduct any taxes already withheld etc etc thu&¤#. Just because this information is not transmitted as part of FATCA does not stop taxman asking for it later from U.S once they know of the accounts existence.

I will pay the tax that I should have paid in the beginning by declaring my world wide income. If they don't request I'm not gonna pay.
So you plan to say nothing until if the taxman inquiries and then you pay any back taxes you may owe them. Sounds like a great plan and kind tax authority if that's all that's required to resolve the tax matter thu&¤#.
 

redvern

New Member
For the record the U.S broker and IRS do not decide how much tax you owe in your home country to the taxman. Why should a U.S broker need to know the amount of capital gains taxes you would owe in your home country? In plain English the U.S has nothing to do with the tax system in your home country beyond adhering to any DTA...lol. It is on you to calculate how much you would owe according to your local tax laws and whether you can deduct any taxes already withheld etc etc thu&¤#. Just because this information is not transmitted as part of FATCA does not stop taxman asking for it later from U.S once they know of the accounts existence.



So you plan to say nothing until if the taxman inquiries and then you pay any back taxes you may owe them. Sounds like a great plan and kind tax authority if that's all that's required to resolve the tax matter thu&¤#.
btw thank you for your answers. let me elaborate;

I've stated I live in a 3rd world country because the direct tax collection(income, capital gains,etc.) here sucks so most tax is collected indirectly via consumption taxes like VAT. Almost everyone shows their gains and income of their business lower or not show it at all to evade taxes, it is the way of life. But is harder in a bank account because the government forces almost all financial institutions to withold taxes. But government never collects anything from you directly. Even in the case of employees, their company withold the tax and pay it to the government. And employees evade tax by getting employed with minumum wage while they get a higher amount unreported.

So when government collect taxes here from interest payments, banks withold the amount and give it to them. No one declares anything. for example no one ever declared their bitcoin gains and banks never cared if the money is coming from a bitcoin exchange. and because bitcoin exchanges aren't regulated financial institutions they don't withold anything.

Therefore, if there is no direct automatic information coming from IRS to local tax autorities I can always evade taxes. But if IRS tells them this person have this much tax to pay or share my total profits, then I will have to declare it. But so far what I have heard US is very reluctant to share this type of info with other nations.

And from afar this might looks like a great place to live because of the possibility of tax evasion, however indirect taxes are just ridiculous. I don't think anyone would wanna pay twice the price for an iphone. one for you and one for the state. and of course ridicilous amount of political unstability :) another reason why I've moved my money offshore.

Well time will show what will happen. thanks again.
 

Martin Everson

Offshore Consultant
Business Angel
But so far what I have heard US is very reluctant to share this type of info with other nations.
Read the link to article I posted I wouldn't say the U.S is reluctant to share info unless the country it is sharing with is a basket case :(. They are already sharing with certain countries.

If your country is not one of the 34 it has started sharing information with I don't think you have anything to worry about. However you may want to think about whether what you are doing is worth it long term or find a legal means to reduce your tax bill thu&¤#.

I don't think anyone would wanna pay twice the price for an iphone.
That can happen if you choose to buy luxury goods ns2.
 

redvern

New Member
Read the link to article I posted I wouldn't say the U.S is reluctant to share info unless the country it is sharing with is a basket case :(. They are already sharing with certain countries.

If your country is not one of the 34 it has started sharing information with I don't think you have anything to worry about. However you may want to think about whether what you are doing is worth it long term or find a legal means to reduce your tax bill thu&¤#.



That can happen if you choose to buy luxury goods ns2.
One thing to correct on my previous post, when I've stated "But if IRS tells them this person have this much tax to pay" The tax I mention here is the one I have to pay to IRS. So if they know this then they can say pay us too :)

yes my country isn't in the list but US forced them to sign FATCA. That's what I mean by being reluctant. Because if USA was following FATCA like it forces on others, not only IRS but private US based financial institutions should have also shared info with foreign tax authorities. But they don't.

Thanks for the advice. I know this isn't a good plan on the long run. If I can manage I would like to move my residency to a low or no income tax jurisdiction.

Everything has high sales tax not just luxury. Electricity, gas, food, etc.


And if anyone reading this did what I'm doing and had problems, please share your experiences ;)
 

Martin Everson

Offshore Consultant
Business Angel
Because if USA was following FATCA like it forces on others, not only IRS but private US based financial institutions should have also shared info with foreign tax authorities. But they don't.
Delusion in plain sight of facts is a disease :(.
 

Nishizawa

Member
There seems to be some holes in FATCA.

The US has signed FATCA with my country and exchanges information with each other. However, the account under which the US provides information is that interest should be at least $ 10.

Today I read the article about this. According them, my countries government tax departure didn't receive information about checking account with 0% interest product.

A government official said in an interview, "We know FATCA is unfair, but we can not help because of US pressure."

I will contact the bank in detail as I have heard from other threads. But if my prediction is correct, it is really funny. The laws created by the US government harass the Americans, but they offer a very powerful bank secrecy to non resident. LOL...
 

Educate

Trusted Member
Business Angel
Why would US report?

Think about it logically...what does US GET from reporting non-us citizen funds being held in US banks?

They gain nothing.

Everyone is reporting to them already.

And while rest of world reports, US can become number 1 offshore, because of it not reporting.

So US gets all of this money from rest of world.

WIN-WIN.

If they started reporting people would stop keeping money there.

And nobody can force them to report. It makes no logical sense for them to do so.
 

Martin Everson

Offshore Consultant
Business Angel
Why would US report?

Think about it logically...what does US GET from reporting non-us citizen funds being held in US banks?
As I said in other thread were you posted...because they signed a Bilateral agreement called FATCA and because of global need to fight tax evasion maybe. Even the Swiss have seen sense.
 

Artemis Eleutheria

Building Trust
Entrepreneur
As I said in other thread were you posted...because they signed a Bilateral agreement called FATCA and because of global need to fight tax evasion maybe. Even the Swiss have seen sense.
Whether the Swiss have seen sense ... or succumbed to extortion is a highly debatable question.
 

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