FATCA

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The Foreign Account Tax Compliance Act (FATCA) is a US law that came into force in 2010 , which obliges natural persons and companies subject to tax in the USA based outside the USA to notify the US tax authorities of tax-relevant data, in particular of foreign accounts. The USA wants to guarantee the mutual exchange of data through bilateral agreements with other countries.

The aim is to combat tax evasion and promote tax compliance in international matters.

history

FATCA came into effect on March 18, 2010 in the USA under the “Hiring Incentives to Restore Employment Act” ( HIRE Act ). The first version of the implementation guideline of the US tax authority Internal Revenue Service (IRS) was published with Notice 2010-60 in September 2010. The IRS published in April 2011, Notice 2011-34 , in July 2011, Notice 2011-53 and in February 2012, the Proposed Regulations .

In July 2012, the USA, together with Germany, France, Great Britain, Italy and Spain, announced that they would implement FATCA in these so-called “FATCA partner countries” on the basis of bilateral agreements. The states presented a bilateral model agreement. Great Britain became the first country to sign an intergovernmental agreement (“IGA” for short) with the USA in September 2012.

As of March 2014, more than 20 states have signed a corresponding IGA, and more than 30 others are in negotiations with the USA. Financial institutions in these countries, known as “FATCA partner countries”, thus receive a legally reliable basis for collecting and reporting the required data.

In January 2013 the IRS published the “Final Regulations” for non-FATCA partner countries.

background

The aim of FATCA is to prevent US taxable persons from reducing their taxes, particularly through financial institutions located abroad or other non-US legal structures. This is to be achieved primarily by expanding the reporting obligations:

  • Financial institutions need to enter into an additional contract with the IRS.
  • All, including non-US customers outside the US, must be clearly identified with regard to their US tax liability. In particular, US persons can be identified who are shareholders in companies and partnerships (if they are primarily investing, i.e. passive companies, according to FATCA: passive NFFE = Non financial foreign entity).
  • Even the suspicion that a person outside the USA could be a US person should oblige financial institutions to investigate and clarify the evidence of US tax liability.
  • Deposit accounts and participations in capital or liabilities not traded on the stock exchange must now be reported annually to the IRS.
  • The notion of revenue to be reported has been greatly expanded.
  • Credits, debits and maximum levels on the accounts are to be reported.

A withholding tax deduction of 30% is made on all income from US sources ("withholdable payments") for customers and financial institutions not willing to cooperate. However, the primary goal is to identify and report US taxpayers.

The tax withholding does not have the character of compensation and does not replace filing the annual FATCA report.

implementation

Germany

On February 8, 2012, the USA issued a joint declaration with the Federal Republic of Germany and other states on an intergovernmental procedure to improve tax compliance in cross-border areas and to implement FATCA: Thereafter

  • not every financial institution has to sign a contract with the IRS
  • the USA may waive the withholding tax
  • the relevant data only has to be transmitted to the German authorities, which then forward them to the US authorities
  • Germany has to issue implementing regulations with regard to FATCA.
  • The USA undertakes to provide the respective contractual partner with information about interest and dividend income that the US tax authorities collect from US financial institutions.

On May 31, 2013, the USA and the Federal Republic of Germany signed an agreement to promote tax compliance in cross-border matters, which the German Bundestag approved by law of October 10, 2013. Based on Section 117c AO, the Federal Ministry of Finance issued the FATCA-USA Implementation Ordinance of July 23, 2014. The BMF letter of November 3, 2015 regulates the details of the practical implementation of the data exchange.

Austria

The agreement between the Republic of Austria and the United States on cooperation to facilitate the implementation of FATCA was adopted in the Council of Ministers on April 29, 2014 and signed on the same day.

Switzerland

In 2014, in an exchange of notes with the USA, Switzerland agreed the agreement between Switzerland and the United States of America on cooperation to facilitate the implementation of FATCA (so-called "FACTA Model 2 IGA"), which softened Swiss banking secrecy : declare the account holder Your bank will provide self-disclosure as to whether you are a US customer; if the answer is yes, the data will be sent directly to the US tax authorities. The USA can request data from customers who are not willing to cooperate using the ordinary administrative assistance channel.

criticism

The problem with FATCA is the special form of American tax law, which, as a prerequisite for tax liability in the United States, is not linked to the residency of a person, but solely to the possession of US citizenship. Since this u. a. is automatically acquired by birth in the USA, people who do not live or work there are registered by FATCA and subject to American tax liability.

For example, the bank of a non-US citizen who was born accidentally through their parents' stay in the USA, but neither lives nor works there, is legally obliged to send their personal and account details to the Federal Central Tax Office solely on the basis of their place of birth to report the American tax authorities to the IRS, with the result that there is an obligation to submit annual American tax returns and, if applicable, tax payments.

Through the legal implementation of FATCA, third countries participate in the enforcement of a tax law that is unique in the world due to its link to citizenship and which violates European tax law principles. Since the entry into force of FATCA, more and more Americans abroad have tried to evade the considerable bureaucratic and possibly also financial consequences resulting from tax liability in the USA by renouncing their citizenship, which, however, is also associated with considerable effort and costs.

From a German point of view, reciprocity is not guaranteed.

The data protection-compliant implementation is a particular challenge with regard to banking secrecy .

European Union

Since the Savings Interest Directive 2003/48 / EC and the Administrative Assistance Directive 2011/16 / EU, there have been instruments comparable to the Foreign Account Tax Compliance Act for the exchange of information on income from financial transactions between EU member states . The guidelines oblige the member states to pass on interest income from persons in other member states to the country of residence ("EU-FATCA").

The Administrative Assistance Directive was amended in 2014 with regard to the obligation to automatically exchange information in the field of taxation. The amending directive was implemented in Germany with the law on the automatic exchange of information about financial accounts in tax matters on December 31, 2015.

With the law, the application of the common reporting standard for the automatic exchange of information about financial accounts in tax matters with member states of the European Union based on the changed EU administrative assistance directive and with third countries based on the OECD agreement of October 29, 2014 signed by the Federal Republic of Germany in Berlin ( Common Reporting Standard ).

See also

Web links

Individual evidence

  1. ↑ Foreign Account Tax Compliance Act (FATCA) website of the United States Department of the Treasury / Resource Center, accessed March 22, 2017.
  2. ↑ FATCA: A New Disclosure and Withholding Regime (English). In: Deloitte.com , September 20, 2010. Retrieved November 3, 2010.
  3. ^ Expulsion from the tax haven , sueddeutsche.de of April 11, 2013.
  4. ↑ For more information, see en: Hiring Incentives to Restore Employment Act .
  5. ↑ Archive link ( Memento of the original from January 21, 2013 in the Internet Archive ) Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice.  @1@ 2Template: Webachiv / IABot / germany.usembassy.gov
  6. ↑ http://london.usembassy.gov/irs/fatca.html ( Memento from January 3, 2015 in the Internet Archive )
  7. ↑ http://www.treasury.gov/resource-center/tax-policy/treaties/Pages/FATCA.aspx
  8. ↑ http://www.pwc.com/us/en/financial-services/publications/fatca-publications/intergovernmental-agreements-monitor.jhtml
  9. ↑ BMF: Joint declaration on an intergovernmental procedure to improve tax compliance in cross-border areas and to implement the Foreign Account Tax Compliance Act (FATCA) ( Memento of the original of April 14, 2012 in the Internet Archive ) Info: The archive link was automatically inserted and still Not checked. Please check the original and archive link according to the instructions and then remove this notice. @1@ 2Template: Webachiv / IABot / www.bundesfinanzministerium.de
  10. ↑ Press release Federal Ministry of Finance , February 22, 2013
  11. ↑ Act on the agreement of May 31, 2013 between the Federal Republic of Germany and the United States of America to promote tax compliance in international matters and with regard to the US information and reporting provisions known as the law on tax compliance with foreign accounts ( Federal Law Gazette II p . 1362 ).
  12. ↑ Ordinance to implement the obligations from the Agreement between the Federal Republic of Germany and the United States of America to promote tax compliance in international matters and with regard to the US information and reporting regulations known as the law on tax compliance with regard to foreign accounts (FATCA-USA Implementation Ordinance - FATCAUSA-UmsV) ( BGBl. I p. 1222 ).
  13. ↑ BMF letter on application issues in connection with the FATCA agreement Link to download on the website of the Federal Central Tax Office , date of publication: November 4, 2015.
  14. ^ Agreement between the Republic of Austria and the United States of America on cooperation to facilitate the implementation of FATCA website of the Federal Ministry of Finance , accessed on March 22, 2017.
  15. ↑ FATCA Agreement ( Memento of the original dated December 5, 2014 in the Internet Archive ) Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice. Website of the Federal Council / State Secretariat for International Financial Matters SIF, as of November 8, 2016.  @1@ 2Template: Webachiv / IABot / www.sif.admin.ch
  16. ↑ Federal Act on International Administrative Assistance in Tax Matters (Tax Administrative Assistance Act, StAhiG) of September 28, 2012.
  17. ↑ "Why expat Americans are giving up Their passports" , BBC News , February 9, 2016th
  18. ↑ Martin Greive, Tina Kaiser: US tax agreement Fatca is a one-way street Die Welt , August 16, 2014.
  19. ↑ Clemens Hohner: FATCA: In the field of tension between data protection and tax compliance April 8, 2013
  20. ↑ FATCA Agreement - The fight against tax evasion and its design in terms of data protection law Website of the Federal Data Protection Commissioner , accessed on March 22, 2017.
  21. ^ Farewell by installments to banking secrecy Neue Zürcher Zeitung , April 22, 2015.
  22. ↑ Stefan Will: FATCA - the EU follows the US agreement ( memento of the original from March 22, 2017 in the Internet Archive ) Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice. 2014. @1@ 2Template: Webachiv / IABot / www.de.capgemini.com
  23. ↑ Ronald Buge: The Common Reporting Standard - FATCA for Europe June 18, 2015.
  24. ↑ Directive 2014/107 / EU of the Council of 9 December 2014 amending Directive 2011/16 / EU with regard to the obligation to automatically exchange information in the field of taxation, OJ. L 359/1 of December 16, 2014.
  25. ↑ Law on the automatic exchange of information about financial accounts in tax matters and on the amendment of other laws ( Memento of the original of March 22, 2017 in the Internet Archive ) Info: The archive link was automatically inserted and not yet checked. Please check the original and archive link according to the instructions and then remove this notice. (FkAustG) of December 21, 2015 ( BGBl. I p. 2531 ).  @1@ 2Template: Webachiv / IABot / www.bundesfinanzministerium.de
  26. ↑ Law on the automatic exchange of information about financial accounts in tax matters and on the amendment of other laws ( Memento of the original of March 22, 2017 in the Internet Archive ) Info: The archive link was automatically inserted and not yet checked. Please check the original and archive link according to the instructions and then remove this notice. Website of the Federal Ministry of Finance , December 30, 2015. @1@ 2Template: Webachiv / IABot / www.bundesfinanzministerium.de
  27. ↑ Automatic exchange of information to combat tax evasion ( memento of the original from March 23, 2017 in the Internet Archive ) Info: The archive link has been inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice. pwc website, accessed March 22, 2017. @1@ 2Template: Webachiv / IABot / www.pwc.at