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Showing posts from March, 2015

UK based Financial Institutions do not need to submit FATCA "nil returns"; what about Singapore Financial Institutions?

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This week, HM Revenue and Customs (HMRC) confirmed that UK financial institutions (FIs) that have no US-reportable accounts will not be required to submit annual 'nil returns' in order to ensure compliance with new rules designed to prevent tax evasion by US citizens.


The change comes after the US Internal Revenue Service (IRS) updated its own Foreign Accounts Tax Compliance Act (FATCA) information to clarify that it itself does not require nil returns but that they might be required by the FI's local tax authority.

It is believed that this issue has been controversial with FIs in 'Model 2' territories – such as Switzerland, Hong Kong and Bermuda – that have to report directly to the IRS.


But what about Singapore? According to a member of IRAS' FATCA team, nil returns will be expected from SG based FI's -
"A Reporting SGFI will need to submit a nil return to IRAS even if it has no US Reportable Accounts. Reporting SGFIs must do so by submitting e…

If I am a signatory on my employer's bank accounts, do I need to report that?

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Each U.S. citizen and permanent resident must report worldwide income to the IRS even when paying taxes elsewhere. Moreover, you must file an annual FBAR (Foreign Bank Account Report now called FinCEN Form 114) disclosing your foreign bank accounts if their aggregate value exceeds $10,000 at any point during the year. The penalties for either failure are big, potentially even criminal. FBAR penalties are even worse than tax evasion.



FBARs are not tied to FATCA. Congress enacted the Bank Secrecy Act, which is codified in Title 31 (Money and Finance) of the U.S. Code, in 1970. The purpose of the Bank Secrecy Act was to require the filing of reports and the retention of records where doing so would be helpful to the U.S. government in carrying out criminal, tax and regulatory investigations.

One of the most important provisions of the Bank Secrecy Act was Section 5314(a), which provides that:
[T]he Secretary of the Treasury shall require a resident or citizen of the United States or a…

Does the health care bill affect expats?

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BACKGROUND

In his campaign and once in office, President Obama promised to provide affordable healthcare to all Americans. As the "stick" part of his carrot and stick approach, he argued that a tax be imposed on all Americans who do not have adequate health insurance and choose not to buy health insurance through one of the new insurance schemes.


It is important to note that the tax applied to all Americans and the health insurance provided under the new schemes covers only healthcare delivered in the US.

This led to two problems facing all Americans living outside the country who do not have US-based health insurance:

1. Most such Americans already have decent health insurance provided by the country in which they live (Europe, Canada, Australia, New Zealand, Japan and others). So it is unfair to require them to buy insurance that they do not need and, unless they move back to the US, cannot use.

2. Americans living in most parts of the developing world do not have (local)…