Jimmy Sexton, an American, was forced to close his checking account at Volksbank in Austria earlier this year.
Americans, take your money elsewhere!
That’s what banks around the world have been telling their U.S. customers, as they try to avoid having to comply with a new tax law due to come into force next year.
Jimmy Sexton, an American, was forced to close his checking account at Volksbank in Austria earlier this year. And Genevieve Besser, an American living in Germany, was given two months notice last year to close her securities account at ING-Diba, the German arm of Dutch bank ING (INGVF).
Financial advisers Peggy and Chad Creveling explain how to stay up-to-date on broker account policies and maintain accounts with firms that welcome overseas Americans.
THE news that amendments to the tax laws will remove the income tax exemption on South Africans working overseas has come as a blow to expatriates and their employers. However, it must be borne in mind that the amendments are not final and considerable discussion will take place before they are implemented.
Even if the amendments are implemented in their current form, there are some measures expats may be able to take to avoid paying full tax as if they were working in South Africa, and even paying double tax – both to the South African Revenue Service (Sars) and to the country in which they are working.
The internationally accepted Common Reporting Standard is to be adopted in China and Hong Kong by 2018
However, tax experts say such high-net-worth individuals probably don’t need to worry too much, as the scheme will not necessarily lead to the mainland tax agency tracking down residents who are going to have their information reported by the overseas countries in which they have those assets.
“There are a number of people who have misunderstood the Common Reporting Standard (CRS) plan,” said Stella Fu, a Shanghai-based senior tax partner at PwC.
“It doesn’t necessarily mean whoever has overseas assets will have to pay double taxation.”
Banks and other financial firms now have to establish the tax residency status of all their clients under new rules to fight tax evasion.
The move comes as Singapore began complying with the Common Reporting Standard (CRS) from Jan 1.
The international standard, endorsed by the Organisation for Economic Cooperation and Development (OECD), allows countries that have agreements with each other to automatically exchange financial data for tax purposes. PwC Singapore tax partner Brendan Egan said the “CRS is a global standard designed to detect and deter tax evasion through non-reporting of income from offshore accounts”.
HONG KONG — As Chinese individuals and companies head overseas in greater numbers, the country’s tax authorities are starting to follow.
The Beijing billionaires who set up cryptically named companies in the British Virgin Islands to hold their fortunes are in the cross hairs. So are the Guangdong salesmen living and working in Africa and Latin America. China’s tax officials are now demanding that citizens start reporting exactly how much money they earn overseas.
In asking for this information, national and municipal tax agencies in China are quietly beginning to enforce a little-known and widely ignored regulation: Citizens and companies must pay domestic taxes on their entire worldwide incomes, not just on what they earn in China
That happened to Carrie Walczak, an American living in Germany, in May. She received a letter from Deutsche Bank [DBKGSG.UL] informing her that her bank account was going to be closed because she is an American.
Walczak, a 37-year-old from upstate New York, lived in Brussels for seven years with her Belgian husband before moving to Bad Homburg, Germany, where she has resided for the past 18 months. Walczak says the letter informed her of new tax regulations required by the U.S. government, and because of that she is being dropped as a customer.
European banks are dumping clients with US citizenship due to a new American law meant to curb tax evasion. The law would require financial institutions around the world to report on certain client activities. Compliance, say many banks, is way too expensive.
The idea was to ensure that US citizens were paying their taxes on investments made through overseas banks. The result, however, has been that Americans in Europe may have difficulties finding banks who want their business.
According to a report in the Wednesday edition of the Financial Times Deutschland, several European banks have elected to no longer serve American securities investors due to stricter reporting requirements pushed through last year by the administration of President Barack Obama.