Does USA - FATCA exchange information with European tax authorities?

[maxmoney]

I have been wondering whether American authorities or services like PayPal respond with financial information and details to European tax authorities upon inquiries? Or are such requests ignored by the US side?

 

[Sols]

FATCA is supposed to be automatic and reciprocal. In reality, the US has been criticized for collecting disproportionately more data than it shares. However, it does share some data. It's just very unpredictable.

The US is better at responding to specific requests, though.

 

[JohnLocke]

I'm not certain about FATCA, but I can confidently say that PayPal and U.S. banks report in great detail to the tax authorities. As mentioned in another thread, a close friend in Denmark is currently facing severe challenges with the tax authorities.

I am closely following the entire process to learn from it and to contribute information here on OCT that could be crucial for others in the same situation, as well as for those who are simply interested in the subject.

 

[OffshorePhantom]

Company depositary accounts (like the LLCs) are not reported since they are not subject to FACTA.

Personal accounts are usually reported if they earn more than $10 in dividends (but you have to read the FACTA agreement between your country and the USA).

For example, if you are a UAE resident there are no reportable accounts from USA, if you are a Germany resident they are reported if you earn more than $10 in dividends, and not the total balance is reported but the total US source income you earned in your account, for example from dividends and others (source https://home.treasury.gov/system/files/131/FATCA-Agreement-Germany-5-31-2013.pdf - read German Reportable Account and Account of each Reporting U.S. Financial Institution: sections).

 

[Martin Everson]

I have been wondering whether American authorities or services like PayPal respond with financial information and details to European tax authorities upon inquiries? Or are such requests ignored by the US side?

Yes they do. I discussed how i.e American Express handed over data to Netherlands on request in another thread.

Court Authorizes Service of John Doe Summons Seeking Information About Dutch Residents Using American Express Cards Linked to Non-Dutch Bank Accounts

A federal court in Texas authorized the Internal Revenue Service (IRS) to serve a John Doe Summons on American Express Travel Related Services Company, the Justice Department announced. The IRS John Doe summons seeks information about persons residing in the Netherlands that have American...

www.justice.gov

You also need to be sure your really using PayPal US. As PayPal EU is a Luxembourg licensed bank and data would be easily available to European Tax man.

 

[Radko]

Personal accounts are usually reported if they earn more than $10 in dividends

Is it $10 in Dividends or in Interest? I thought dividends are subject to withholding, but Interest are not and that's when they reported.

 

[DomOCT]

Keep in mind that using the US to evade taxes in your jurisdiction may constitute a violation of the federal mail and wire fraud statute

 

[OffshorePhantom]

Interest. But also interests may be subject to withholding since are FDAP (Fixed, Determinable, Annual, Periodical (FDAP) Income | Internal Revenue Service), United States - Corporate - Withholding taxes - see column Interest paid by US obligors in general