Moving money out of offshore tax havens and into the US is becoming a big business, according to a Bloomberg report.
The report, published today on the Bloomberg website, notes that the loosely-populated, Southwestern US state of Nevada is among a handful of states that are becoming destinations of choice for those looking to move their wealth to a less taxing jurisdiction. Until now, Nevada has probably been best known to those living outside the US for being the state in which Las Vegas, America’s gambling centre, is located.
“After years of lambasting other countries for helping rich Americans hide their money offshore, the US is emerging as a leading tax and secrecy haven for rich foreigners,” the Bloomberg report notes.
“By resisting new global disclosure standards, the US is creating a hot new market, becoming the go-to place to stash foreign wealth. Everyone from London lawyers to Swiss trust companies is getting in on the act, helping the world’s rich move accounts from places like the Bahamas and the British Virgin Islands to Nevada, Wyoming, and South Dakota.”
Some, the report’s writers continue, are starting to call the US “the new Switzerland”.
As reported, the US has made it clear that it does not intend to participate in the OECD-led Common Reporting Standard disclosure scheme, under which more than 60 countries have agreed to start automatically exchanging details of individuals’ bank accounts and trusts from next year. The US argues that it has no need to participate because it has its own global tax disclosure scheme, the Foreign Account Tax Compliance Act (FATCA), which obliges financial institutions around the world to report to the US tax authorities on bank and investment accounts held outside of the US by American citizens.
News that the United States may be on its way to becoming a tax haven, and as such helping to shield nationals of other countries from tax, is likely to infuriate many American expatriates, whose lives and finances have been disrupted, in some cases significantly, by FATCA.
Indeed, the Bloomberg report quotes Peter A. Cotorceanu, a lawyer at Zurich law firm Anaford AG, as writing in a recent report: “How ironic – no, how perverse – that the USA, which has been so sanctimonious in its condemnation of Swiss banks, has become the banking secrecy jurisdiction du jour…
“That ‘giant sucking sound’ you hear? It is the sound of money rushing to the USA.”
To read the Bloomberg report, click here.