By Gareth Vaughan
Prime Minister John Key says New Zealand has no choice but to comply with a United States law aimed at combating tax avoidance by US taxpayers and citizens with foreign accounts.
The Government last November introduced enabling legislation for an inter-governmental agreement with the US on its controversial Foreign Accounts Tax Compliance Act, known as FATCA. The legislation comes in an omnibus tax bill - the Taxation (Annual Rates, Employee Allowances, and Remedial Matters) Bill. Submissions on the Bill close today, February 5.
In a regulatory impact statement the Inland Revenue Department (IRD) says because assisting the Americans to implement FATCA will require local financial institutions to collect data on customers and pass relevant information onto the IRD, this will "impair" customers' privacy rights. But IRD also says the benefits of enacting the legislation greatly outweigh the costs, even though the economic costs of not enacting the legislation can't be accurately estimated.
Key told Radio NZ there's no choice for NZ but to comply with FATCA.
"If we didn't comply then there were significant implications for New Zealand and in fact they've made everyone in the world who wants to do business with them comply under those terms," Key said.
"There's nothing unique from New Zealand. The bottom line is we're just doing what everyone else in the world is doing. If we don't want to do it then we are restricted in what we do."
According to the US Internal Revenue Service (IRS) FATCA focuses on reporting by US taxpayers about certain foreign financial accounts and offshore assets, by foreign financial institutions about financial accounts held by US taxpayers, and foreign entities in which US taxpayers hold a substantial ownership interest.
"The objective of FATCA is the reporting of foreign financial assets; withholding is the cost of not reporting," the IRS says.
The best option for banks
Under FATCA financial institutions, regardless of their location, are required to report on certain US account-holders directly to the IRS or face a withholding tax on US sourced income of 30%. Financial institutions means banks, life insurers and managed funds. In recognition that compliance with FATCA would impose a significant compliance burden on financial institutions, the US developed the option of inter-governmental agreements.
PwC has information on all the countries doing FATCA inter-governmental agreements with the US here.
Entering into an inter-governmental agreement means financial institutions don't have to carry out some of the more compliance-heavy aspects of FATCA, IRD says. In 2011 bank lobby group the NZ Bankers' Association said it could cost local banks NZ$100 million to comply with FATCA.
"Financial institutions in New Zealand see significant risk in not having domestic legislation in place," says IRD. "A working group of representatives from the financial services sector has been actively engaged and are broadly supportive of the aims of the legislation."
Cabinet has agreed to enter into an inter-governmental agreement with the US in a way that will require local financial institutions to supply the relevant information on their customers to the IRS through the IRD. This is likely to be the cheaper and easier option for NZ financial institutions because it means they don't have to directly enter into agreements with the IRS.
IRD receiving information from financial institutions and passing it onto the IRS is expected to cost NZ taxpayers between $5.667 million and $8.543 million over five years.
Based on census data there are more than 18,000 Americans in NZ.
"For the purposes of this statement, it is worth noting that the United States is one of the very few countries that taxes individuals on a 'citizenship' basis. This means that a United States citizen remains liable to file tax returns (and pay tax if necessary) in the United States irrespective of how long they have been living abroad," IRD says.
"In practice, this may mean that a New Zealand resident that is also a United States citizen/taxpayer may be caught by FATCA reporting, even if they have been living in New Zealand for many years and maintain no links to the United States (apart from continuing to be a United States citizen). People in this position that have not consistently complied with their United States reporting and payment obligations are therefore likely to be concerned that being reported on to the IRS may potentially expose them to significant tax and penalty charges."
Other countries expected to follow
Meanwhile IRD suggests the international trend towards countering tax evasion means it's likely other countries could adopt their own versions of FATCA in the future, meaning agreements like NZ's impending inter-governmental agreement with the US become more commonplace. Here's IRD's FATCA page.
Labour Party revenue spokesman David Clark told Radio NZ it would be nice for NZ to get something in return for helping out US authorities.
"New Zealand is collecting information for the US government at a cost to New Zealand taxpayers. The bankers are going to charge the overhead for collecting the information to all of their customers then they're going to pass that information onto the IRD who is going to hand it over to the IRS," said Clark.
"We've doing the job of the American authorities at our expense and it would be nice to think that New Zealand was at least asking the US to do something for us."
IRD does note the deal the two countries are negotiating is a reciprocal agreement. This, it says, means in time IRD will also receive information from the US on NZ taxpayers with accounts in US financial institutions. But, IRD adds, any financial benefits from this arrangement can't be estimated because it doesn't know how many NZ residents have undeclared accounts in US financial institutions.
'Benefits outweigh the costs'
"The economic costs of not enacting the legislation proposed are unable to be accurately estimated," IRD says. "Similarly, any fiscal gains from the reciprocal nature of any inter-governmental agreement cannot currently be estimated because Inland Revenue is not currently aware of the number of unreported US accounts held by New Zealand tax residents."
"Nevertheless, it is concluded that the benefits of enacting this legislation greatly outweigh the costs. Without the ability to comply with FATCA (i.e. if the necessary enabling legislation is not in place), New Zealand financial institutions may be faced with a choice of not investing in the United States (either directly or indirectly), or investing in the United States and facing a 30% withholding penalty on any profits derived."
Because the legislation will require financial institutions to collect data on their customers and pass information onto IRD, it will "impair the privacy rights" of the customers concerned, IRD adds.
"There is also an argument that, because the first people likely to be impacted by the legislation are United States taxpayers, the legislation will enable discrimination against this group. To this end, the proposals have been discussed with the Office of the Privacy Commissioner and the Ministry of Justice, both of whom understand the need for legislation in this instance."
FATCA was signed into law by President Barack Obama in 2010. After delays it's now scheduled to take effect from July 1 this year. IRS Commissioner John Koskinen recently told journalists there wouldn't be any further delays.
69 Comments
What do I see in the very first line of text in the linked regulatory impact statement? "This statement was prepared by Inland Revenue Department.", that's what. You might want to revisit references to "Treasury" in the rest of the article above, in case other finickity old farts like me think you haven't really read the statement properly
"If we didn't comply then there were significant implications for New Zealand and in fact
they've made everyone in the world who wants to do business with them comply under those terms,
" Key said.
Read the above carefully then remember
JK is prepared to pay "THE PRICE THEY DEMAND or NO business with them " - SO what price for the TPP???
Any chance we can demand that they reciprocate.
It's an odd mind set that Key is displaying. He seems to be saying that he would rather continue to shelter and aid tax dodgers, but is being forced to do otherwise. He is painting himself as one who is slithery, not straight up and down, and aligned to a bunch of similar USA individuals. Ex Merill Lynch currency trading manager whose dealings in NZ appear far from transparent. - Seems to tally.
They can demand, but all they get in the articles is a vague promise to advocate for reciprocity with the American Congress. So, short answer 'Nyet'
Changes are NOT allowed in the Agreement, so that should tell you how bi-lateral this agreement is.
The IRS has dictated (opposed by Congress and banking associations in America) that interest paid to Non Resident Aliens (their term for you Kiwis) must be reported to the IRS for trading purposes, but it does NOT apply to foreign entities or come with any of the complex detailed financial reporting required of NZ financial institutions.
Reciprocity is a sham, a phantom, weighed on a scale totally tipped to the U.S. favor, not open to negotiation, and is NOT reciprocity in any stretch of the imagination.
USFIs for example are NOT required to search out and look for all Kiwis living across America who have green cards and have local accounts in American Banks and report account balances, transaction details, etc.
Below is what is required of NZ institutions taken straight from the IGA which John Key says he has no option but sign under duress.
Read Article 2 Obligations to Obtain and Exchange Information with Respect to Reportable Accounts
Also, in the above link read Article 6 on reciprocity...
1. Reciprocity. The [Government of the] United States acknowledges the need to achieve equivalent levels of reciprocal automatic information exchange with [FATCAPartner]. The [Government of the] United States is committed to further improvetransparency and enhance the exchange relationship with [FATCA Partner] by pursuing the adoption of regulations and advocating and supporting relevant legislation to achieve such equivalent levels of reciprocal automatic exchange.;
BTW, that is a Treasury document led by the Democrats...
The Republicans now are calling for FATCA Repeal, so the battle has now entered the political realm in America...
It is not reasonable that they demand this information and are not willing to clearly and completely reciprocate. The answer has to be, we are ready and very willing to provide this information as soon as you do likewise. If that is not acceptable, they are behaving like overbearing bullies.
Note to self:
Don't ever bet on John Key in a Prize Fight. He will just lay down on the mat in the opening round and take a TKO before the bell rings to begin a fight!
Of course John has Options! Capitulation because some other poodles are doing what America demands via Sanctions and extortion, doesn't mean he has to immediately roll over and comply.
Geez...
Here are 10 options for you Mr. Key, in no particular order, if you are so worried singularly about the financial institutions and don't give a whit about the rights of Kiwi Citizens.
1. Show some Kiwi Pride and fortitude publicly! At least make a public statement of condemnation of U.S. Practice and send it to the President along with a request for T-off times. Tell him New Zealand is NOT a Tax Haven like America is, and to stop the hypocrisy. Demand that Obama clean up their own back yard before coming to the Pacific to extort their will.
2. You could form a coalition with the TPP partners and tell America to back off the extortion threats or all negotiations stop right now! That frankly will win you allies in the Democrat party that are needed to Repeal FATCA. Use that negotiation lever!
3. You could threaten America with taking it to the WTO for restraint of Trade for using Sanctions against NZ, a country who has engaged in NO evasion or illegal Activity. How can you accept sanctions when you have done NOTHING to justify them? You are NOT Iran for god's sake!
4. You could instruct NZ financial institutions to retaliate and withhold 30% of any NZ revenue that any US financial Institution holds in New Zealand.
5. You could engage a U.S. Lobbying firm to team with with the Republicans (the Nationals natural allies) to support their recent Repeal FATCA resolution. Americans know even less about how bad FATCA is than Kiwis. If you can spend $25 million on an American Cup, how about spending $25 million to Stop FATCA with a media educational lobbying effort for ignorant Americans. Why give into the Democrat FATCAnatics that created this Monster? You are philosophically opposed to them. Spend some money helping defeat the Senators most responsible.
6. You could command Ambassador Mike Moore to call John Kerry and tell him if the FATCA extortion doesn't immediately stop and the threat removed, you are pulling all troops and support for any U.S. Military mission.
7. You could have you UN ambassador bring up a resolution to the Security Council to condemn America's practice of Citizenship Taxation in exactly the same manner as America signed onto the resolution against Eritrea taxing its citizens living abroad.
8. You could command your Financial Institutions to begin their divestiture from U.S. assets and look elsewhere to place their money. You could set an example yourself with a public declaration that you will no longer own any U.S. assets.
9. You could threaten to stop your cooperation with the NSA spying apparatus in New Zealand and end your membership in the 5 eyes. FATCA is just U.S spying, so end cooperation with the U.S. surveillance State.
10. You could call the U.S, Ambassador to NZ on the carpet and tell him his extortion method of conducting international affairs is unacceptable, It is NOT an "international norm"! If they don't stop such abhorrent behavior and engage in multi-lateral mechanisms he can pack his bags and go home!
So, don't give me this pathetic whine that you have 'No Options'. You have plenty of options Sir, you are JUST AFRAID TO TAKE THEM!
Frankly your willingness to discriminate against a class of New Zealand Citizens and residents, their wives, children and business partners who the IRS (at its sole discretion) determines are "U.S. Persons" means you accept US domination over your Citizens! This is an immoral and unjust violation of your Bill of Rights and Human rights that doesn't end just because you change your laws. What demand will you give into next? What if China or Russia or North Korea want the same?
Your willingness to change your laws and so easily capitulate along with the other poodles means you have lost any moral high ground. You are descending into the cellar of despots. You are giving into a bully who does not know how to practice "international norms". They now see your weak kneed response, and will be back for MORE! What an example to set for your children when they are bullied at school!
If you are going to take a dive, then at least put up a face saving fight for New Zealand Sovereignty, or just apply now to be the 51st Union and get it over with! At least then you can join Nevada, Delaware or Wyoming as a REAL tax havens and not have any worries that the Feds will extort you to stop!
... our current PM has such pride in his beautiful country , girt-by-sea , that after he's wiped the floor with Cunny & the Baby Bonus Welfarists in the 2014 general election , he will push onto the following election and attempt to be the first ever 4 times elected prime minister ...
Bless him !
I sort of find this amazing in the land of the free, that you are still liable to pay US taxes even if you reside permanently in another country, for what?? So does this mean that an American living and working here has to pay taxes in two countries or does the States get the tax and we go "he".
Did I hear right, that the banks who have dealings with the States will be subjected to 30% taxation if they do not comply, would I then be right in thinking that if US citizens here chose banks that have no footprint in the States there would be nothing they could do. I am kind of thinking the likes of the Co-oprative Bank, maybe
Yes my understanding is that they are liable to pay US taxes and must file a return, but they are rebated for tax paid in the country of residence. I was told that some years ago so it could have subsequently changed. Seems a sensible idea. We should do the same as it could counter some tax dodgers.
Yes, they have to file and pay taxes in two countries. Not ever tax is rebated.
America, via it VERY complex process does allow for some kinds of credit depending on the type if income, but you are not credited 1 for 1, and there are many items, that you are taxed on that NO credit is provide for, so short answer, YES you are double taxed.
Tax sheltered accounts in the country of your residence are NOT recognized by the IRS, and you have to pay taxes on them, as well as complete a terribly complex form if they involve what the US considers to be foreign mutual funds or trusts.
Also, in most countries you pay a GST or VAT. If you live in American States, it is called a SALES tax. You will get a credit for that on your tax filing in America, but if you live in NZ, you will NOT get any credit of the 15% you are paying here.
So, when you hear someone say "they are rebated" the right answer is rather, "it all depends on the type and amount of income."
Finally, at certain income levels, those with the "U.S. Person' designation, living in NZ will now have to pay a very complex new ObamaCare tax with a complexity of considerations that will make your head spin. None of that will be rebated to you because you live abroad.
More onerous and a penalty producing problem is the form filing requirements that come with significant penalties for even NON Willful Failure to file. America is the expert in creating "Form Crime"
The ones that is getting the most attention right now, are the FWhat? forms... FATCA and FBAR informational forms which are duplicative, and have some serious penalties for not filing, even if you are lucky enough NOT to owe the U.S. government taxes.
One other consideration that people fail to recognize as a tax of sorts, is the cost of getting competent international tax filing assistance. It is VERY hard to find someone to help you file your taxes without paying a significant fee to some Compliance Complex member, like an international CPA. It is NOT cheap, and you would be silly NOT to see that cost for what it is, a tax, that goes to the tax practitioner but not the U.S. government.
Finally, the complexity and cost of tax filings for Americans abroad is a well documented and understood problem that Congress could resolve if they joined the international norm of residency based taxation. However, they consider themselves "exceptional" and those with the "IRS designated "U.S. Persons" with American toxic taint living in New Zealand have to now consider the cost vs benefit of remaining a member of the U.S. Tax, Form and Penalty Club.
FATCA maybe telling you that it is time to let it go.
Thanks "Just Me". That has significantly increased my understanding.
I can see the sense of having something like this to counter tax evasion and recoup the costs of bringing up (child costs, health and education) and ongoing support of your overseas citizens, but the system you have described seems uneccessarily complex and punitive/vindictive on citizens who have the timerity to reside over seas. I am surprised that we hear so many American accents here.
Chris...
You maybe hearing less of them, except as short time visitors. Although a lot living in NZ, are still in the dark about FATCA and their tax reporting requirements. It is only since the Dems came to power, in pursuit of homeland tax evaders that this offshore jihad has started with has now infected New Zealand residents. Probably won't stop until (if) they are voted out of power in the next election.
he American system of Citizenship taxation, very unique in the world, coupled with punitive penalties and Exit Taxes is designed to keep them at home. Additionally, there is a Reed Amendment which allows the State Department to ban anyone from returning to America if "the IRS determines they think" it is for tax purposes,
You, in New Zealand, are actually more free than Americans to take up opportunities around the world.
I would not exchange your passport for an American one, I would NOT lust after a greencard, as the cost is too high now. You are the lucky country. :) And mothers, with FATCA reporting now, don't let your children grow up to marry Americans!
:)
They can visit Disney land for a short period however.
But this little video should amuse you...
Time to ask your family members, are they an American?
.... yes , but only a few thousand do so , each year ...
When Facebook co-founder Eduardo Saverin renounced his US citizenship , to become a Singapore citizen , there was a political backlash in the US ... and exit fees of 30 % were proposed ... so Uncle Sam can have one last grab at your family jewels ... Senators Shumer and Casey were behind the cash snatch ...
Actually, Gummy Bear, the numbers have been soaring, and the best count is probably the FBI report of about 3,000 last year but even that is NOT all inclusive of those shedding their 'U.S. Personhood'.
This trend appears to be mostly FATCA related, and long term residents abroad letting go of that passport as too expensive to maintain. This as accelerated after the passage of FATCA buried in the Hire Act.
Stories by the BBC, or other MSM type outfits usually just report the IRS "name and shame list" which is way under counting what is going on.
More on the actual FBI numbers can be read here,... http://bit.ly/1hEfuVc
or here...
http://bit.ly/152xJv7
Your point is a reasonable, but compared to the very low numbers of the past, this sudden rise is a canary in a coal mine. It is very disturbing to the U.S. exceptional mentality, the idea that even one would surrender something that they have been lead to believe is so precious is jarring.
There is another interesting stat, and that is of all those that crave and finally obtain a Greencard, the number that move onto Citizenship is very low, around 30%.
It takes time for perceptions of value to change, but FATCA round up combined with Citizenship taxation is really making folks question the value vs the cost, and this trend shows no sign of changing..
Frankly as this article says, Citizenship-Based Taxation and Taxpayer Rights Don't Mix
http://taxpol.blogspot.co.nz/2014/01/citizenship-based-taxation-and-tax…
BTW, how many Kiwis went into their Consulates and renounced their citizenship last year? Would be curious. Wonder if the NZG keeps stats?
Not last years figures, but here is a good discussion of NZ vs US up to 2012
http://www.overseas-exile.com/2012/05/ignored-data-behind-politics-of.h…
NZ has a similar rate to US, a little higher in the long term but the numbers are so small you can't make too much out of the stats. Also a link from there to some other countries rates
http://isaacbrocksociety.ca/2012/05/23/comparing-renunciation-rates-aro…
Here is the latest update on the IRS "Name and Shame" list last quarter.
and it, of course, understates the problem, but this is the lasting legacy of Obama and his merry FATCAnatics working on their global GATCAenstein monster. :)
That is a longer subject, but you have two choices. One is renouncing which will cost you $450, or relinquishing which is similar but different depending on your circumstances and should cost you nothing...
Both require you going to a U.S consulate ( maybe twice), filing out forms, and going through an interview process plus swearing you are NOT under duress. Your passport will be taken from you, and voided.
Once done you will "eventually" be sent a Certificate of Loss of Nationality (CLN) from the State Department which you would / could you use to prove to a NZ Bank, that you are NOT a U.S. Person anymore. That would be important when they start asking you to fill out IRS forms or prove you are NOT.
Now, by renouncing you do NOT escape any back tax filing or payment responsibilities.
The IRS requires you to fill out a form 8854, I think (I will have to check) where you declare your past tax compliance for 5 years before your renouncing date. If you have NOT done this, then you will have the cost and expense of filing taxes and FATCA forms for this period. There is an opinion, and I think it is a valid one, that you do NOT have to file past FBARs, as they operate under a different Title (31) then under IRS Title (26)
Now, if you meet certain income and asset thresholds, you are considered a "covered Expat" and will have to pay an exit tax on your world wide assets, in a mark to market exercise as if you sold them on the day you renounced, and pay a 15% tax on that too.
If you are below the thresholds ($2mil in USD) you escape this tax.
Once you do all of this, you will hear nothing,unless they decide you still owe more, but you can assume you are free and clear.
If you fail to file form 8854, then you are immediately considered a covered Expat, and you get to be name and shamed in the quarterly IRS list that is published in the Federal Register and journalist comb through looking for high profile renouncers. But even if you are not, you could still be listed.
Now, that is only a quick overview, and if you have more questions or want to understand the subject better, there is a lot of information at Isaac Brock Society on an "ask your question" thread. But before you start asking you can just read past comments and posts and frankly get most of your questions answered. This is not a legal blog, and these are just very knowledgeable novices who have gone through the process and they are helping each navigate the pitfalls.
http://isaacbrocksociety.ca/renunciation/
I am not one renouncing my citizenship, but I certainly understand why others are. I am in the CCW category. I comply, complain, and WARN. Consider my comments here in that vein.
I hear the renunciation numbers are going up at the Auckland Consulate as people are probably betting that FATCA will be imposed and assume John Key is going to capitulate. From this article that looks like it was a good bet.
This is a good International attorney with a wit that I enjoy learning from...
http://hodgen.com/renunciation-trends-in-auckland/
Hope this helps you or someone you know.
A lot of Americas are still in denial that their beloved Obama could have unleashed this jihad on the world, but there you go. FATCA, more than ObamaCare will be his lasting negative legacy. And I voted for him the first time. Go figure... :)
Steven...
This little 4 minute amusing video will explain FATCA better than any article...
Sometimes you get lucky! I always advise folks to think long and hard about what they are planning to do, as getting a Greencard is NOT advisable or necessary in a lot of cases. Those that marry Americans really should keep all their assets and accounts and tax reporting separate, and children born of an union with an American, Don't rush to register them as Americans. Wait until they are at an age of consent to consider what it might mean.
Also, I know a lot of Immigrants in America that are really getting hammered by the IRS offshore jihad and the FBAR penalties, and they NEVER understood the implications of leaving accounts in their homeland open.
Obama is leaving a very foul lasting legacy of a global nature that will be far worse the the impacts of ObamaCare. Good intentions are scary things when in the hands of ideological politicians.
I think its a bit unfair to label this Obama? Strikes me as more Congress, ie anyway and whatever way to tax in order to keep the game going. So if we can tax "non-americans, ie ppl who dont vote" all the better.
Quite surprised on the self-employed thing...wow is all I can say....once the hooks are in, ouch.
Oh and Obamacare looks to be a big win...for the Democrats...
regards
I know that is NOT a happy message to hear, and consider, especially for those of us that voted for him for the 1st go around, but yes, FATCA is his initiative. He is responsible and it is NOT unfair.
It was hard for me to accept for a while.
The most charitable thing I can say, is maybe he envisioned something simpler, but the Ideologues that surround him, (The FATCAnatics) ran away with it and turned it into a Monster, that he has NO intention of stopping.
Here is the report that those close to the Administration, say NO more FATCA Delay.
So, he has to take the blame.
Back up a bit and view a well documented history...
This is Obama early in the Administration talking about what he wanted to do...
This is where the FATCA ball started rolling in 2009.
http://bit.ly/1nYlFVc
From 1099s to 544 pages of FATCA regulations and multi versions of IGA agreements....
And notice what he says about "What if financial institutions won't cooperate?" They will assume they are tax havens and act according. This was translated to mean in legislation that he signed, to be a 30% withholding on the world's financial institutions if they fail to comply!
The best you can say is, FATCA is a simple premise gone terribly wrong..
A good intention run amuck!
But notice he made no reference to exceptions for Americans resident abroad or having dual citizenship and neither has Congress even though the problems of bank account closures have been pointed out to Geithner in hearings...
He passed the blame onto Congress, but he was the one that launched the initiative, (see below) so a bit disingenuous. He offered no exemptions nor have they even consider "same country accounts" exemption that could stop some of the collateral damage.
So tell me again how unfair to say that Obama is responsible?
Also, NEVER forget, if you back up to the beginning of that video and listen to the whole 10 minutes, you will see that it is the Secretary of Treasury Geithner standing next to Obama announcing the whole range of tax avoidance/evasion counter initiatives. He was running the show and reports to Obama!
Also if you will listen a little farther he, you will hear him praising the architects of FATCA, the same one that attached it as a last minute rider on the 2010 Hire Act. Baucas, Rangel, Doggett and Levin, are four names that should ring a bell with you, if you have been following this as long as I have. Here is their press release a few months after Obama announced his new plans.
If that video and this press release doesn't represent Obama's vision and mission and show him as responsible, then what does?
Very Fair to place the blame squarely on Obama, and frankly he probably would take pride in the claim.
Thus, his will be his legacy, every American that is renouncing their Citizenship because of FATCA.
We have to be realist and face the facts, uncomfortable as they may be.
I rest my case. :)
As for ObamaCare, I would disagree, and so would a LOT of the Left side of the spectrum who saw it as a sell out to the insurance companies, and are terribly embarrassed by the Cockup rollout.
They are continuing to have problems with the site, especially security of data, and the young are NOT signing up. Mostly those getting insurance appear to be those that got kicked out of the insurance plans in spite of his assurances that if they like their plan, they could keep their plan.
When you have the leadership of the major Unions writing Obama public letters complaining about their members being cut back to part time to avoid insurance costs, and placing the blame straight on ObamaCare regulations this hardly appears to be a BIG WIN!
I know partisans argue it either way come election time, depending on your favorite side, but even recent reports by the CBO that ObamaCare is going to lead to significant job losses is really hurting him politically. As to who is right if it is good or bad, I guess the mid terms will tell us something about what the homelanders think.
Hopefully the Brits won't be that stupid, but I guess I have to quit calling those that FALL for FOUL FATCA stupid, as the Canadians are taking up the challenge!
Thanks for reminding me of the double taxation that occurs with self employment taxes back to the States. Basically, if the IRS is really going to push hard at taxing Kiwis with the "U.S, Person" taint on them, (and apparently they are) I would be shutting down the business and/or renouncing or heading home.
If you don't think that this is about taxing Americans living abroad, then you need to listen to Ex Treasury Chief and Tax Cheat Geithner.
Guess that is what American wants, all of its diaspora to either give up the passport, or come home and live within the hallow borders.
This is very costly to U.S, global dynamism, (China and Germany are NOT so dumb as that to follow the U.S model of Citizenship taxation.) but then the U.S. does a lot of things that just harm it more than anyone else, and the politicians that dream up this stuff, never learn.
Why? Because they have co-enabler politicians like John Keys who pathetically answer their extortion demands, with a "We have No Option" lament! Go figure.
Effectively though, "we" do have no option. Well the option is poke the finger at the US and watch as our banks and companies pay a 30% with holding tax on anything in or passing through America (have I got that right?) So really NZ banks and businesses are snookered in effect. are they not?
regards
They are snookered by the dominance of the USD and their willingness to play in the U.S Markets.
America is using that dominance, not with humble caution, or respectful stewardship. It gives them the power to say, "Do as I demand, or else! and, by the way...", with a cynical and devilish chuckle, "You have NO choice!"
Of course politicians around the world, allow themselves to be picked off one by one with the "No Option" lament, and the U.S.strategy of 'divide and conqueror works!
Have to hand it to the FATCAnatics, they are VERY clever, and very manipulative.
Now, will it work with all countries? There are ~193 on this little blue orb in space, and Russia and China value their sovereignty from America more than the Kiwis or Canadians do, so that will be very interesting to watch and see.
This on Russia http://bit.ly/1eVa5T8
This on China http://bit.ly/1kYvno5
I really think that FATCA, and its evolution to a global GATCA is one of the most interesting regulatory developments in the world right now. IT IS A BIG STORY.
The interplay of the FATCAnatics in the District of Criminals putting wind in the sails of the OECD elite tax bureaucrats working to create an GATCAenstein monster is mostly ignored by media, amazingly enough.
BTW, A chief FATCAnatic architect from Treasury just got a job there. http://bit.ly/1d06uqv
It is all too boring for the masses who are hooked on pop culture entertainment and sports media, which frankly has become 'the opiate' of the masses in western culture rather than religion. It is very good at keeping them distracted from what they should really be paying attention to, imho
It's caught me - same as Wyatt Creech, born there, my Dad is Kiwi, came back when I was 18 months old.
The US IRS wants me to apply for a Social Security Number (which involves expensive posting of original birth certificates and ID), fill in three years of delinquent tax forms and six years of delinquent FBARs. And send them a "check" for any tax I may owe.
Yes, I wrote to them (a mission in itself) and asked *facepalm*
annecm - I strongly suggest you visit http://isaacbrocksociety.ca/ where there is lots of information about your options. I am sorry that you have recently discovered the US considers you tax chattel.
It may well be inevitable that New Zealand feels forced to capitulate and sign one of these agreements just as Canada has just done. There is still hope that the Canadian parliament might reject this legislation. All it takes is one nation to stand up and say "NO" and FATCA would fold up like a cheap tent. Unfortunately, I very much doubt that nation is New Zealand.
Either way, at the very least, I expect the government in this country to recognise the fact that many New Zealanders will be harmed by this legislation and that it is causing fear, anxiety and depression among those that suddenly find out they are US "tax chattel". They need to stop pretending that it is only "Americans living in New Zealand" and doesn't effect "real" Kiwis. Are they suddenly 2nd class citizens now?
This also needs to open a serious debate about a US tax policy that will threaten New Zealand's tax base due to self-employment taxes, capital gains taxes, taxes on retirement products etc. that will be levied on US persons. They will also attempt to seize assets of anyone not in compliance (google FBAR penalties) and there is also the thousands of $$ that will have to be handed over to US tax preparers by anyone that wants to comply, another transfer of New Zealand wealth to the US.
The government says they respect the "sovereign right" of the US to tax its citizens and collect penalties as it sees fit. Really? Should we respect this "right" at the expense of our own tax base and the financial destruction of some of our citizens? What respect does the US show for New Zealand's sovereign rights?
raegun, if the enabling legislation is passed it will force ALL New Zealand financial institutions to comply with the contents of the agreement that will be signed between the US and New Zealand to implement FATCA. The only way they will not need to comply is if they are listed as an exemption in Annex II of the IGA. Laws made in Washington will be enforced here in New Zealand. Sad but true.
This isnt the case, if NZ Govn says no the IRS simply "taxes" our banks into extinction. About the only country that could so [resist] this would be China or the EU and the latter also wants its tax cut, so unlikely.
Really its simple if you are a US citizen you pay up or drop it, end of story.
regards
For any U.S. Persons, in the "OMG what should I do?" phase, this link will provide helpful suggestions from those that have decided to exit the Tax, Form and Penalty Club which sadly enough, the U.S. Passport now represents. They have been there before you...
http://isaacbrocksociety.ca/renunciation/
Also, you might consider signing the Abolish FATCA Petition, not that the Dems will take any notice.
http://isaacbrocksociety.ca/2014/02/03/abolish-fatca-petition-from-repu…
What I wouldn't do, is keep your heads in the sand about what NZ FATCA capitulation could mean for you, your spouse, your business partner or anyone that has signing authority on ANY account you have!
Here are a lot of comments by Canadians making the discovery about Canada's roll over. If I were you, I would read every last comment. :)
Start here...
http://isaacbrocksociety.ca/2014/02/05/the-canada-united-states-fatca-i…
It's really concerning that the NZ government is just going to roll over on this, with sod-all information available on how this will actually work in practice. What are the threshholds? What are the rebates, if any? Just how badly am I going to get screwed over just because my spouse is a yank?
Kakapo, the links provided above by Just Me are a good starting place if you have just learned of this. It takes a while to get your head around. Unfortunately, your spouse accounts may be reported if they exceed the thresholds (currently 50K) and that will include any accounts that you hold jointly.
He is PM here, hence I cant see he has US citizenship.
You are also being libelious I suspect,
"Under common law, to constitute defamation, a claim must generally be false and have been made to someone other than the person defamed"
I suggest you stick to calling him a slimy toad, if you think he is of course.
regards
He'd have had a green card for working in Wall street, so he'salready liable.
So anybody can own a mansion in Hawaii, you dont have to be a citizen?
MPs can have dual citizenship now, Helen revoked that consitutional barrier back in 2003 ish for Harry Dynohaven who has DutCh NZ citizenship.
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