• Home
  • News
    • People moves
    • Africa
    • Asia
    • Australia
    • Canada
    • Caribbean
    • Domicile
    • Europe
    • Latin America
    • North America
    • Middle East
    • US
    • US
    • UK
  • Products
    • Funds
    • Pensions
    • Platforms
    • Insurance
    • Investments
    • Private Banking
    • Citizenship
    • Taxation
  • Fintech
  • Regulation
  • ESG
  • Expats
  • In Depth
  • Special Reports
  • Directory
  • Video
  • Advertise with us
  • Directory
  • Events
  • European Fund Selector
  • Newsletters
  • Follow us
    • Twitter
    • LinkedIn
    • Newsletters
  • Advertise with us
  • Directory
  • Events
    • Upcoming events
      event logo
      International Investment Nordic Forum 2021

      International Investment is delighted to announce the 2021 International Investment Nordic Forum which will take place on Tuesday March 9, at 9am (GMT). This curated virtual event will be broadcast live and will feature a series of fund manager interviews and presentations, as well as interviews with some of the Nordic regions top fund selectors.

      • Date: 09 Mar 2021
      • ONLINE, ONLINE
      event logo
      Sustainable Investment Festival 2021

      The Sustainable Investment Festival will run online from 22-25 June and will include thought-provoking presentations from renowned keynote speakers, innovative breakout events and sessions specifically tailored to meet the information needs of fund selectors, financial advisers, pension consultants, trustees and scheme managers.

      • Date: 22 Jun 2021
      • Online, Online
      View all events
  • European Fund Selector
International Investment
International Investment

Sponsored by

Sharing Alpha
  • Home
  • News
  • Products
  • Fintech
  • Regulation
  • ESG
  • Expats
  • In Depth
  • Special Reports
  • Video
  • Taxation

American expat group calls for 'Same Country' FATCA exemption

American expat group calls for 'Same Country' FATCA exemption
  • Helen Burggraf
  • 16 August 2016
  • Tweet  
  • Facebook  
  • LinkedIn  
  • Send to  

The American Citizens Abroad has urged the US deputy assistant secretary for International Tax Affairs to exempt the bank accounts of Americans expatriates in the country in which they currently reside from having to be reported to the US tax authorities as part of the Foreign Account Tax Compliance Act.

In a letter, a copy of which may be viewed on the ACA’s website,  ACA legal counsel Charles Bruce and assistant legal counsel Glen Frost told Robert B Stack that such a provision could be “surprisingly simple” to introduce to the final versions of the FATCA regulations packages, which, they noted, the US Treasury Department is understood to be currently working on.

Related articles

  • US Treasury Dept 'slams door on Same Country Exemption' for expat Americans
  • American Citizens Abroad webinar explains its SDFCU account for expats
  • Expat vote seen key in US election, but candidates avoid committing firmly to its causes
  • US congressman introduces new FATCA repeal bill

The Same Country exemption is needed, the ACA told Stack (as it reminded him it has explained in previous correspondence) because of FATCA’s so-called “lock-out” effect. This refers to the way banks and other financial services providers typically decline to accept Americans as clients, in order not to have to commit to the expensive and time-consuming business of reporting their banking details to the US Internal Revenue Service on their accounts, as FATCA requires them to – resulting in American expats being unable to obtain (or being “locked out of”) local bank accounts, mortgages, loans or other financial services.

FATCA was signed into law by President Obama in 2010 and came into effect on 1 July 2014. It was aimed at putting an end to the use of offshore bank accounts by US citizens to hide assets and income, but has had the unintentional effect of making life extraordinarily difficult for many hundreds of thousands of law-abiding and often, not particularly wealthy US expatriates.

To disentangle themselves from the law’s effects, thousands of Americans have sought to renounce their citizenships, sending renunciation rates soaring and prompting the US Government to more than quadruple the price of renouncing, which is in addition to other costs that can include a significant “exit tax”, depending on the individual.

Under the “Same Country” exemption, as the ACA and a number of other US expat groups envision it, a US person who genuinely lives in a foreign country and has an ordinary bank account, that institution should be able to treat it as if they were not American, and that individual also would not be required to list the account when filing their IRS Form 8938, which is a “Statement of Specified Foreign Financial Assets”.

Instead, the individual would provide a “mercifully short and to the point” form   to their bank (or “foreign financial institution” or FFI, in FATCA-speak) and the IRS, explaining the facts of this arrangement, the ACA told Stack in its letter.

“There is no doubt that the ‘lockout’ effect exists,” the ACA letter continues.

“As we found in our investigation, a ‘Same Country’ exemption would make a difference – changing banks’ behaviour towards Americans abroad – in that it addresses the key concerns of banks relating to FATCA.

“Moreover, the ‘Same Country’ exemption will benefit the administration of the voluntary compliance system. Americans abroad, in order to obtain the benefit of greater access to banking services, will want to timely file their US tax return, with the ‘Same Country’ election attached…help[ing] the persistent problem of noncompliance.”

US -friendly banking 

As reported here in March, the ACA sought to address the banking services “lockout” problem American expats have been facing by partnering with the State Department Federal Credit Union (SDFCU) to provide US-citizen-friendly banking services to expats who can’t otherwise access them.

The ACA said the ACA/SDFCU Account had been designed to give ordinary American expats a full range of banking services without their needing to provide either a US address, or be affiliated with a government agency.

  • Tweet  
  • Facebook  
  • LinkedIn  
  • Send to  
  • Topics
  • Taxation
  • Rest of World
  • US
  • ACA
  • expatriates
  • Tax

More on Taxation

UK chancellor 'likely' to freeze lifetime allowance: reports

  • Taxation
  • 26 February 2021
Comment: The pandemic has dramatically complicated issues of tax residency

  • Comment
  • 15 February 2021
Report proposes 5% UK wealth tax to offset pandemic costs

  • Taxation
  • 09 December 2020
Britons in France warned of steep capital gains tax rises when selling property

  • Taxation
  • 07 December 2020
HMRC payments to tax evasion whistleblowers up 63%

  • Taxation
  • 04 December 2020
Back to Top

Most read

Global UHNWI population to grow by 27% over the next five years: Knight Frank
Global UHNWI population to grow by 27% over the next five years: Knight Frank
Amati Global Investors launches strategic metals fund
Amati Global Investors launches strategic metals fund
Aviva announces exit from Turkey
Aviva announces exit from Turkey
HSBC Malaysia appoints head of global banking
HSBC Malaysia appoints head of global banking
Erratic Bitcoin leaves industry divided as Square invests $170m
Erratic Bitcoin leaves industry divided as Square invests $170m
  • Contact Us
  • Marketing solutions
  • About Incisive Media
  • Terms and conditions
  • Policies
  • Careers
  • Twitter
  • LinkedIn
  • Newsletters

© Incisive Business Media (IP) Limited, Published by Incisive Business Media Limited, New London House, 172 Drury Lane, London WC2B 5QR, registered in England and Wales with company registration numbers 09177174 & 09178013

Digital publisher of the year
Digital publisher of the year 2010, 2013, 2016 & 2017
Loading