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

[JustAnotherNomad]

Just out of curiosity (I'm a nomad and expat) - they report to your country of residency, right? And they probably usually don't even need a tax residency certificate, a simple utility bill would usually be enough?
So if you just get residency in e.g. Panama and get a utility bill in your name - wouldn't all reporting go to Panama? Or do they report to your country of citizenship as well? Or to all countries you've ever been resident in before (if you change the address associated to your account)?

 

[Martin Everson]

Just out of curiosity (I'm a nomad and expat) - they report to your country of residency, right?

Yes

And they probably usually don't even need a tax residency certificate, a simple utility bill would usually be enough?

Yes

So if you just get residency in e.g. Panama and get a utility bill in your name - wouldn't all reporting go to Panama?

Yes

Or do they report to your country of citizenship as well?

No

Or to all countries you've ever been resident in before (if you change the address associated to your account)?

Yes

 

[JustAnotherNomad]

Thanks. Then why do people worry so much about this stuff?

 

[Martin Everson]

Thanks. Then why do people worry so much about this stuff?

You mean FATCA or CRS?

 

[JustAnotherNomad]

Both really, assuming one is not a US citizen.
Say you’re Italian and you want to hide some money from the taxman. You get residency in Panama, then open a US LLC and bank account and give your Panama address.
Run your business using the US company which would be taxable as your personal income. But since all reporting goes to Panama, how would the Italian tax office ever find out?
Obviously it’s illegal and I prefer to sleep at night, so I would never do it.
But given that some people in this forum probably feel differently about that, why is anyone worried about CRS/FATCA? Why all the trouble with going to non-CRS countries when you can just make the reporting useless so easily?

 

[sullyferdinand]

Say you’re Italian and you want to hide some money from the taxman. You get residency in Panama, then open a US LLC and bank account and give your Panama address.
Run your business using the US company which would be taxable as your personal income. But since all reporting goes to Panama, how would the Italian tax office ever find out?

I had 2 clients that were caught using this strategy
It took 3-3 and half years from the moment the account was opened for the tax institution to find out, but at the end they caught him

Belgium and Italy were the countries



Pay your taxes and sleep at night
There are million ways to reduce the taxes, no need to go for the ''0% tax jurisdiction, opened with darks and nominees and bla bla bla and put all my money in a banana republic or in a shitty country that is not part of CRS''.....

Why people cant just setup a structure where they minimize taxes? 2hs session with a trusted tax advisor is what it takes, nothing else

 

[JustAnotherNomad]

How did they find out, do you happen to know?

 

[Martin Everson]

But since all reporting goes to Panama, how would the Italian tax office ever find out?

Very easily if you remain living in Italy. You think governments don't share information outside of FATCA....lol. Read the below for example I posted on how it can be done.

ATM withdrawal information processing

If a person who is resident of country X uses a debit card to withdraw large amounts in country X from his or her offshore account, will country X somehow get this info? Let us say the person uses bank ATMs of 3 banks to withdraw this money. These bank ATMs obviously see this information that...

www.offshorecorptalk.com

But given that some people in this forum probably feel differently about that, why is anyone worried about CRS/FATCA?

Because it affects them. Not everyone wants to be a criminal and give dodgy docs etc. Most people want to reduce taxes legally as they have legit operations and don't fancy going to jail when caught.

Why all the trouble with going to non-CRS countries when you can just make the reporting useless so easily?

Because committing bank fraud in U.S is never ever ever ever a good idea. Just saying.

 

[JustAnotherNomad]

So the Dutch couple was caught because they withdrew large sums in the Netherlands, €300,000 in total.
Obviously you would be quite dumb to do that. I bet they even went to the same ATM every time. I'm not surprised that would raise an alarm and I don't doubt that any financial institution would hand over all information in such a case. I also wouldn't be surprised if there was an alert for using the same credit card every day for a certain period of time, like somebody buying their morning coffee from Starbucks with the same Seychelles credit card for 5 years in a row.
It would be a very simple query for any payment processor, such as "Give me a list of all foreign credit cards that were used on more than 182 days this year, and for a total amount of at least €10,000". Then they could simply ask for details on the account holders. I bet there are many other systems in place as well. But my question were in regards to automatic information exchange (CRS/FATCA).

Because it affects them. Not everyone wants to be a criminal and give dodgy docs etc. Most people want to reduce taxes legally as they have legit operations and don't fancy going to jail when caught.

The people who want to avoid CRS? That doesn't make a lot of sense. If you have nothing to hide, why would you care about CRS/FATCA at all?
And there are lots of questions in this forum about avoiding CRS.

Because committing bank fraud in U.S is never ever ever ever a good idea. Just saying.

Again, we are talking about people who are already committing a crime (tax evasion). I personally would never do it, for the reasons mentioned, but when you're already risking to go to jail for another crime, I don't think those people would care much about giving incorrect information to US banks. Especially when they don't owe US taxes.

 

[JustAnotherNomad]

What do you mean by "this strategy"? Using accounts from non-CRS countries or giving false tax residency information to banks in CRS countries?

I personally don't care because I'm on the legal side anyway. I don't care about CRS. They can share my information all day long.
But so many people here want to open accounts in non-CRS countries and I'm wondering why if it's really so easy to trick the system. Instead of having the money from your online side business in some dodgy bank in Georgia or Panama or Puerto Rico or whatever, why not have it in a bank in, whatever, Canada, when you can just make them share the information with a country that doesn't give a damn, instead of the country where you actually live? That's what I'm trying to understand.

 

[sullyferdinand]

. Instead of having the money from your online side business in some dodgy bank in Georgia or Panama or Puerto Rico or whatever, why not have it in a bank in, whatever, Canada, when you can just make them share the information with a country that doesn't give a damn, instead of the country where you actually live? That's what I'm trying to understand.

Because they think they are smart

Funny thing is that they end up paying nominee services, nominee ubos, virtual offices and other useless services just to end up opening accounts in Comoros Islands, Dominican Republic, Vanuaut etc or a shitty EMI that will collapse in 12 months and loose all their money. Instead of just getting a proper setup and pay minimum tax....

 

[JustAnotherNomad]

I'm not comparing it to a proper legal structure, I'm comparing it to opening accounts in a CRS country with fake documents. Just as illegal, but cheaper and less risk of the bank going under. I mean, if they want to do something illegal anyway to save a few bucks, why not go that way then?

 

[Martin Everson]

The people who want to avoid CRS? That doesn't make a lot of sense. If you have nothing to hide, why would you care about CRS/FATCA at all?

Asset protection that's why in some cases. Ask the Jews what happened to them in 1930's Germany when Nazi's created asset registers of everything they owned. (see below link).

DAC6: new EU tax disclosure rules

What’s DAC6 all about? The EU is introducing an additional level of transparency in order to detect potentially aggressive tax arrangements. The amendment to Directive 2011/16/EU on mandatory automatic exchange of information in the field of taxation in relation to reportable cross-border...

www.offshorecorptalk.com

Also some people are from politically unstable and corrupt countries where confiscation, kidnapping and extortion and expropriation is a reality. Some people want a plan B in todays world.

btw everyone has something to hide. You are on here with an alias for a reason right?...lol .

 

[JustAnotherNomad]

So you really think it's better to put your money into a bank account in Georgia, instead of lying to a North-American or Asian bank about where you live? Assuming the money is clean and taxed.

 

[ih8socialism]

So you really think it's better to put your money into a bank account in Georgia, instead of lying to a North-American or Asian bank about where you live? Assuming the money is clean and taxed.

I don't trust german / eu goverment at all so yes lol

 

[DavidS]

Both really, assuming one is not a US citizen.
Say you’re Italian and you want to hide some money from the taxman. You get residency in Panama, then open a US LLC and bank account and give your Panama address.
Run your business using the US company which would be taxable as your personal income. But since all reporting goes to Panama, how would the Italian tax office ever find out?
Obviously it’s illegal and I prefer to sleep at night, so I would never do it.
But given that some people in this forum probably feel differently about that, why is anyone worried about CRS/FATCA? Why all the trouble with going to non-CRS countries when you can just make the reporting useless so easily?

How do you "Open residency" in Panama without actually spending time there?

 

[DavidS]

Why people cant just setup a structure where they minimize taxes? 2hs session with a trusted tax advisor is what it takes, nothing else

Can you recommend such structure?

 

[JustAnotherNomad]

How do you "Open residency" in Panama without actually spending time there?

I don't think it's a good idea. But as far as a I know, you only go there once for a couple days to get your residency set up. After that, you only have to visit for 1 day every 2 years to keep the residency active.
But if you're only doing that to make CRS reports go to the wrong country, then I guess it wouldn't even matter if the residency expires.
But like I said, I think it's a stupid move. Better to go for a legal solution, so you can sleep well at night.

 

[msantoso]

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?

However, somehow they asked for the tax identification number in the annual data update...

 

[msantoso]

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.

But ..... doesn't your broker ask for your tax identification number at the time of opening your account or on the annual data update? I experienced it with my US broker.