Hi, does anyone know what type of USA bank account gets reported and when, is FACTA really reciprocal?
I agree that looking for a non-CRS setup is not a solution in a long term but just wanted to find this out out of curiosity
I came across this article:
https://www.linkedin.com/pulse/imminent-democrat-controlled-congress-fatca-reporting-mark-morris
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The biggest impediment to automatic exchange of information is that the US maintains a list of countries that the US deems satisfactory to provide information. The recent IRS Rev Proc 2020-15 updated list of countries, deposit interest paid to nonresident aliens published April 2020 is published irregularly, adding one or two countries on average every 18 months. E.g. only Georgia and Singapore have been added in the last year. There are only 49 nations on the list. that US can automatically share FATCA information with. So, even if the IRS gathers information on non-US persons with financial accounts in the USA for FATCA reciprocal reporting, this information cannot be sent to a country if that country is not deemed safe... For example, Chinese, Argentina, Peru or Japan residents can carry on hiding money in the USA until the cows come home.
US territories - every FATCA intergovernmental agreement, without exception (see definition of the USA for the agreement), explicitly exempts the five US inhabited territories from the definition of USA. Financial Institutions in Puerto Rico will mint it by promoting themselves as FATCA and CRS exempt.
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No reporting by Investment Entity if it is considered located in the same jurisdiction as its account holder - For example here, the US bank will not report on its Investment Entity account holder, or report 'no reportable persons'. The untaxed Investment Entity will not report on its account holder which is resident in the same jurisdiction as the reporting Investment Entity The jurisdiction that is responsible to enforce reporting by an untaxed Investment Entity is described in my other articles. The loophole is based on the principle that an untaxed Investment entity such as a trust is subject to the jurisdiction where the trustee is resident. So, where a trust has its account with US bank and the trustee is a French resident and the settlor & beneficiaries are French-residents. The US bank won't report on the trust as it's an FI. The trust won't report on its equity interest, settlor and beneficiaries, because the FI and the account holders are all located in France.
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Thanks
I agree that looking for a non-CRS setup is not a solution in a long term but just wanted to find this out out of curiosity
I came across this article:
https://www.linkedin.com/pulse/imminent-democrat-controlled-congress-fatca-reporting-mark-morris
-------------------------------------------quote
The biggest impediment to automatic exchange of information is that the US maintains a list of countries that the US deems satisfactory to provide information. The recent IRS Rev Proc 2020-15 updated list of countries, deposit interest paid to nonresident aliens published April 2020 is published irregularly, adding one or two countries on average every 18 months. E.g. only Georgia and Singapore have been added in the last year. There are only 49 nations on the list. that US can automatically share FATCA information with. So, even if the IRS gathers information on non-US persons with financial accounts in the USA for FATCA reciprocal reporting, this information cannot be sent to a country if that country is not deemed safe... For example, Chinese, Argentina, Peru or Japan residents can carry on hiding money in the USA until the cows come home.
US territories - every FATCA intergovernmental agreement, without exception (see definition of the USA for the agreement), explicitly exempts the five US inhabited territories from the definition of USA. Financial Institutions in Puerto Rico will mint it by promoting themselves as FATCA and CRS exempt.
---
No reporting by Investment Entity if it is considered located in the same jurisdiction as its account holder - For example here, the US bank will not report on its Investment Entity account holder, or report 'no reportable persons'. The untaxed Investment Entity will not report on its account holder which is resident in the same jurisdiction as the reporting Investment Entity The jurisdiction that is responsible to enforce reporting by an untaxed Investment Entity is described in my other articles. The loophole is based on the principle that an untaxed Investment entity such as a trust is subject to the jurisdiction where the trustee is resident. So, where a trust has its account with US bank and the trustee is a French resident and the settlor & beneficiaries are French-residents. The US bank won't report on the trust as it's an FI. The trust won't report on its equity interest, settlor and beneficiaries, because the FI and the account holders are all located in France.
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Thanks
