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NZ Govt May Gut Privacy Laws For US Citizens and Ex-Pats
Master Moose writes with an excerpt from stuff.co.nz indicating that New Zealand's government "wants to override privacy laws to supply the U.S. Government with private details about Americans living in New Zealand. As part of a global tax-dodging crackdown, the U.S. is forcing banks and other financial institutions to hand over the private financial details of U.S. 'persons' and companies based overseas. From July this year, Kiwi banks and insurers will be required to provide U.S. tax authorities with American customers' contact details, bank account numbers and transaction history. The move comes amid continuing criticism of New Zealand's participation in Trans Pacific Partnership Agreement talks, aimed at securing a wider-reaching free trade deal with the U.S. and other countries. Critics say the secretive talks could restrict New Zealand's ability to make its own laws on everything from the environment to employment."
On 23 May 2012, United States Senator Ron Wyden (D-OR) introduced S. 3225, proposed legislation that would require the Office of the United States Trade Representative to disclose its TPP documents to all members of Congress.[77] Wyden said the bill clarifies the intent of the 2002 legislation which was supposed to increase Congressional access to information about USTR activity, but which, according to Wyden, is being incorrectly interpreted by the USTR as justification to excessively limit such access.[78] Wyden asserted:
“ The majority of Congress is being kept in the dark as to the substance of the TPP negotiations, while representatives of U.S. corporations—like Halliburton, Chevron, PHRMA, Comcast, and the Motion Picture Association of America—are being consulted and made privy to details of the agreement. [...] More than two months after receiving the proper security credentials, my staff is still barred from viewing the details of the proposals that USTR is advancing. We hear that the process by which TPP is being negotiated has been a model of transparency. I disagree with that statement.[78]
http://en.wikipedia.org/wiki/T...
"If any question why we died, Tell them because our fathers lied."
If you want to renounce the obligations of citizenship, you must also renounce the benefits of citizenship and officially naturalize as a citizen of another country. Seems fair to me.
[Sir Garlon] is the marvellest knight that is now living, for he destroyeth many good knights, for he goeth invisible.
What if you're keeping your American citizenship because you're only staying a couple years? Do you get the benefits then?
Back when the Roman Empire was THE power, you could cross the Danube into "barbarian lands" or exercise other options for getting away from punishing taxes and oppressive laws of the late Empire. In the American-dominated world, you are rapidly running out of those kinds of options.
There's no tax dodger like a USA tax dodger.
If you want to renounce the obligations of citizenship, you must also renounce the benefits of citizenship and officially naturalize as a citizen of another country. Seems fair to me.
Most countries distinguish clearly between being a citizen and a resident. And usually the only thing you can't do as a non-citizen resident is voting or standing in general elections, or sometimes things like joining the army or police force. Everything else, there should be little difference.
It seems that the USA has this weird interpretation that US citizens should have all the legal obligations that US residents should have, even if they are not US residents anymore, including obligations that US residents that are not citizens.
http://www2.macleans.ca/2013/1...
Old news.
..don't panic
"From July this year, Kiwi banks and insurers will be required to provide U.S. tax authorities with American customers' contact details, bank account numbers and transaction history. "
Bullshit. The US can pass as many laws it wants, and no matter how much it whines and cries about it, Banks in New Zealand cannot be compelled to comply, because US Law is not the Supreme Law of the Universe. It only applies within the borders of the United States.
Any attempt to impose laws on another sovereign nation is an overt Act of War.
The US demands power over its citizens residing overseas that no other country in the world demands, and it uses its political and economic clout to get those countries to help them remind US Citizens overseas that the right to be a citizen includes the right to be charged for felony clerical error.
You'd have to ask the consulate to be sure, but I would be surprised if you'd be denied the same tax breaks residents can get. There are probably some things you can't get if you live overseas, but then, you also benefit a whole lot more from that consulate (for example) than you would if you had stayed in the US.
[Sir Garlon] is the marvellest knight that is now living, for he destroyeth many good knights, for he goeth invisible.
As an American that has traveled and lived abroad, I can state with some authority that it is often quite nice to be an American when traveling. (This was pre-2K, so there are, ahem, some differences now.) When living abroad I paid my local and home country taxes. It wasn't that difficult. It was very nice, to be honest. As an American, you get a big fat deductible for your tax returns. And the local taxes weren't that bad either.
That said, the intrusiveness and 'do as I say, not as I do' attitude of the US of A is pretty disgusting. The New Zealand government should tell the US to shear sheep, or whatever is Kiwi for 'go fuck yourself'.
They do it with nukes. Use that as a precedent. Seriously.
One of the reasons companies move overseas is to avoid US taxes on anything they don't bring back to the US, why should actual citizens be any different?
I decide to move to NZ in my retirement. After a lifetime of working sitting on the porch and watching life go by isn't for me so I start or buy a local business. I hire local employees and pay all the required taxes in NZ for the income made there. I pay US taxes on my retirement income derived from US accounts. Why if I'm not sending money back to the US for deposit (which would have to be reported) does the US need to know anything about income derived from the NZ business?
So does that mean if someone lives for six months in the US, and six months in NZ, they can officially become stateless?
Sign me up!
Someone flopped a steamer in the gene pool.
This isn't about expats living/earning wages overseas, it's about Americans using overseas bank accounts to hide income that they earned in the US, in order to avoid paying taxes on that.
It's causing a lot of upset here in Canada, too, because of our privacy laws, and because the Americans are refusing to give us a reciprocal agreement for Canadians in the US. (on the grounds that they don't enforce foreign laws).
His point is that America continues to tax expats, but social services end once you are not a resident for the most part. Overseas residence makes you inelgible for almost every kind of welfare.
Western European countries and Canada also cut off social services for expats, but also does not tax them on income when outside the country.
This isn't about expats living/earning wages overseas, it's about Americans using overseas bank accounts to hide income that they earned in the US, in order to avoid paying taxes on that.
It's causing a lot of upset here in Canada, too, because of our privacy laws, and because the Americans are refusing to give us a reciprocal agreement for Canadians in the US. (on the grounds that they don't enforce foreign laws).
In one country where I know how the tax office does it, if they can't get the numbers from you then they estimate. If they can't get the numbers from you in the next year, then obviously the estimate was too low so they estimate a lot higher. On the other hand, they don't tax foreign income. They only add it into the equation for calculating the tax rate for your local income.
New Zealand is playing the role of US puppy, as proved the Kim Dotcom house raid, breaking their own laws in the process as anyway the priority was coming from outside.
You won't fix US attitude from outside, and if you really want to run, don't do it to one of its own colonies.
So the goal was to catch US residents who were claiming they weren't in order to dodge taxes, and it ended up affecting US citizens who AREN'T residents?
Kind of makes it hard to blame the tax dodgers. I would prefer my tax dollars not go to an organization as counterproductive as the US government too.
Well ppl should google "32 trillion offshore needs IRS attention"
The real fat cats have stashed more then the national debt in offshore havens.
I dont think the Warfare-Welfare state would spend the money much better,
but chasing down small timers is a sad joke when the real financial pirates
get off scott free for the most part.
Once all "Western" nations are bound together under the same all-encompassing treaties that override local law, guess what you'll end up with?
The New World Order, aka one world government. And votes will have no effect on these treaties, as such there will no longer be citizens only the Masters.
And then what country's passport are you going to use to gain entry for the next 6 months?
It is a scam I have never had food stamps and they should cut cut it all let them have cake...!
It seems that the USA has this weird interpretation that US citizens should have all the legal obligations that US residents should have, even if they are not US residents anymore, including obligations that US residents that are not citizens.
That's because most expats demand free entry into the USA whenever they feel like it, wave their US passport at border controls when they travel, run to the nearest US Embassy whenever there's trouble, etc.
You should renounce your US citizenship if you want them to stop asking for stuff in return for those privileges.
No sig today...
that the right to be a citizen includes the right to be charged for felony kiddy fiddling
FTFY. Watch that slope, it's a little slick.
Progressives in the US want to "tax the rich" and don't want to let them get off the hook by moving abroad. This kind of worldwide tracking and enforcement is the inevitable consequence.
European nations just let their wealthy move abroad and don't tax them when they're living outside the country. They also don't count them in inequality statistics, which is one reason why European Gini indexes are so low. Maybe a good dose of this kind of European-style progressivism would do the US some good?
Taxation is not an obligation of citizenship, it's an obligation of the consumption of government services. If you don't live in a country, you don't need the services of its government - you don't drive on its roads, you're not protected by its police, fire departments, etc. Civilized countries tax based on residency or source of income, not citizenship, and seem to have no trouble providing their citizens with embassies, consular services, and passports. Why not US?
The United States stands alongside the the shining example of Eritrea, (and even friggin' Eritrea only wants 2%) by taxing its citizens regardless of where they live.
Suppose every nation taxed based on citizenship instead of residency. Every bank on the planet would be responsible for vetting the citizenship of every customer, and keeping up with the taxation data reporting requirements of 190 sovereign nations. It doesn't scale, it costs more to enforce than it collects, and it invokes a huge negative externality by placing the burden of compliance on banks (with costs passed through to all of their clients) that may not even have international branches.
Civilized nations tax based on residency, not citizenship.
I am an American living and working overseas for over half my life. My ties to the U.S. are almost none-existent. My use of U.S. goods and services is possibly even less than many foreigners around the World. Occasionally I might buy a U.S. made product, but that is even rare given the poor quality.
Here are the real effects, and this is just a short list I have time to type.
1. Assumption that all Americans overseas are criminals by definition, even if we did not owe any taxes. The IRS, by their own calculations, says the basic forms will take over 72 hours a year for an American Expat to prepare to properly report their taxes. Most expat tax experts, can not figure them out.
2. Foreign banks are closing or will refuse to open accounts for Americans. I know dozens of real cases already among friends. It is not just American citizens. It is anyone with a U.S. mail address, green card, or any payments transiting the United States to foreign banks. So, yes, many, many none Americans are caught up in this sweep of private information, the majority of which has nothing to do with tax money.
3. The country I live in also has banking secrecy and privacy laws, and as a full resident, it even goes further because in the country where I live it is a constitutional right extended to both residents and foreigners.
4. It also includes any company where an American might be a 10% owner or more, or might have signature authority over the company accounts or other assets. Just think what most international companies are going to do when making a choice between an American employee or CEO vs. a foreigner, as far as disclosing private company information to the U.S. government simply because they have an American working there.
5. It includes disclosing foreign none-citizen none-resident private information to the U.S. government that are family members of an American citizen abroad. For example, a wife or kids account, investments, or pretty much anywhere the American might (you have to prove the negative) have authority over the money . Partnerships of all forms, of all sorts of complexity, are also subject to it. Imagine as a foreigner entering in to a contract with an American citizen, and having to report to the U.S. IRS your private information and dealings. Guess what most foreigners will do from now on to avoid such problems.
6. This includes not only bank accounts, but investments, pensions, insurance policies, various types of contracts. I am not even sure how many insurance policies I have, let alone what would need to be reported. If you are a foreign insurance company, just think how happy they will be to issue a policy to an American client living overseas.
In short, I am forced to obtain citizenship in my country of residency, and give up my citizenship in the United States. It is either that, or say good-bye to my entire life work and return to the United States to starve at some bullshit minimum wage job (I own my own company outside the United States).
Forget the Berlin Wall, what they are building in the United States is far, far more dangerous.
How does that differ from the situation of expats from a country that does treat expatriate citizens as residents?
The United States and Eritrea are the only two countries in the world that require their non-resident citizens to file tax returns.
The Information Revolution will be fought on the command line.
Oh, how I miss self-righteous Americans. I'll renounce as soon as I have a new passport, thank you very much. In the meantime, perhaps you should consider why other countries don't charge their citizens, who also happily travel home once in while.
Let the bears pay the bear tax. I pay the Homer tax!
systemd is Roko's Basilisk.
This is affecting Canada as well, and according to one article, this may affect Canadian citizens as well even if they have never been US residents or citizens.
Could you imagine the uproar if (say) Iran threatened to trawl through US bank records for details on Iranian Americans? Totally disgusting. And yet the US can get away with it.
This isn't about expats living/earning wages overseas, it's about Americans using overseas bank accounts to hide income that they earned in the US, in order to avoid paying taxes on that.
That might be the way they sell it on that side of the pond, but the fact of the matter is that US citizens living abroad are still required to file, and (generally, if they live in a low-tax country) pay, US taxes. If I in Switzerland earn an income based entirely within the borders of Switzerland, the US still wants a cut, and the law is designed to catch such foreign residents in addition to US residents.
The critical issue here is that we don't know exactly what "US Person" means. Canada is in the throes of the same issue, with the US demanding access to banking records for any US Persons, and the scope of this is troubling.
US Persons includes US citizens, of course. But it includes folks who might be entitled to citizenship through birth or parentage, whether or not they are actual citizens. It would include anyone who has ever resided in the US. And the definition can be manipulated to mean whatever the US decides it to mean, down the road. It could eventually mean anyone who has visited the US or anyone who has a dollar-denominated bank account or basically anyone who they are interested in.
There is no burden of proof on the IRS to show that they are entitled to specific records. They can ask for anyone's records and claim "US Person" interest. Do you suppose they will not simply vacuum up everything?
And if there is any avenue for information to come to the US government, you know that the NSA will have it. And the DEA and all the rest.
Canadian banks should grow some balls and refuse to maintain accounts for US citizens, just like many many other countries have started to do.
As someone who has "been there and done that" I can tell you Canada attempts to do this. You need to remain outside for at least 3 years. Prior to that they will send you all sorts of forms to see how close your ties are and charge you a "top up tax" if they deem you to be "too close".
devil's advocate, citizens *are* "served" by the military (force projection, or threat thereof), consulates/embassies, etc, even while not resident. you're right that at least the clerical services are probably not terribly expensive on a per-expat basis, relative to the traveling citizenry that are residents. but...
You should renounce your US citizenship if you want them to stop asking for stuff in return for those privileges.
For many people, this is not possible. The US government imposes a hefty renunciation tax that can in some cases far exceed a citizen's annual income. If you don't have the money to pay the tax, you must remain a citizen.
This isn't about expats living/earning wages overseas, it's about Americans using overseas bank accounts to hide income that they earned in the US, in order to avoid paying taxes on that.
That might be the way they sell it on that side of the pond, but the fact of the matter is that US citizens living abroad are still required to file, and (generally, if they live in a low-tax country) pay, US taxes. If I in Switzerland earn an income based entirely within the borders of Switzerland, the US still wants a cut, and the law is designed to catch such foreign residents in addition to US residents.
You can deduct taxes you pay to the Swiss. Given the outcry against "communist European taxes" that should eliminate your US tax burden. Unless you're doing shell games of course.
That might be the way they sell it on that side of the pond, but the fact of the matter is that US citizens living abroad are still required to file, and (generally, if they live in a low-tax country) pay, US taxes. If I in Switzerland earn an income based entirely within the borders of Switzerland, the US still wants a cut, and the law is designed to catch such foreign residents in addition to US residents.
And if you're in Switzerland, earning an income in Switzerland, maintaining residence in Switzerland, and paying taxes in Switzerland, on what grounds do the Americans have *any* right to lay claim to your income? Taxes are meant to pay for a government infrastructure and services, and if you're living in Switzerland, you're not actually using any of those services -- at least, none of the ones that aren't paid for with user fees. They have user fees for passport/diplomatic services, which are the only actual government services I could see such a person taking advantage of....
Tax dodgers?
Wealthy enough to emigrate to New Zealand?
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I'm okay with this!
Since it is a percentage of your holdings, you should be able to pay the tax if you are, in fact, moving to another country and actually selling everything. If you are changing citizenship in name only and remaining in the US the whole year then, yes, you may have some issues. The law seems pretty carefully crafted to not harm those who are really going to obtain citizenship and live elsewhere and to only target rich guys who are playing games.
Do you have an example that would state otherwise? I'd be interested.
Peter predicted that you would "deliberately forget" creation 2000 years ago...
Then your answer should be that you don't enforce foreign laws either. And you should stick to your guns until they change their duplicitous tune.
Peter predicted that you would "deliberately forget" creation 2000 years ago...
Don't ya think they are taking advantage of loopholes made by our government? I don't know im shit poor they live in a whole different tax level then I do lol.
Jack of all trades,master of none
Have a mortgage aboard for you foreign home? That's currency speculation. If the exchange rate drops, that's taxed by the US at capital gains rates. Exchange rate rises? No, you can't deduct that from your taxes.
Go home you say? We'll if you've worked a day in America for each of the last 8 calendar years, that's a 30% exit tax please (on everything, including capital gains on foreign property). Any money in a 401k? Then pay the early withdrawal penalty as well (even if you are not withdrawing)
Unfortunately, it's not that simple.... some of our banks are publicly traded on the American stock exchanges, for example. If our banks want to continue doing business in the US, then they have to adhere to American laws.
We also have a two-faced weasel for a prime minister, a man whose idea of "fiscal transparency" was putting a see-through window in the new money when they redesigned it a couple of years ago. And unfortunately, due to voter apathy, the fucker actually got a majority government too (seriously, only 25% of eligible voters actually voted for him). Because of these factors, it's unlikely our government will show any teeth at all over this one.
You misunderstand. You don't have to sell your assets or anything; they tax you on what you have as if you have sold it right then and there, even without you actually doing so. They could very well be taxing you on money that you don't even have. Suppose you owned a house in France that was worth $500,000 at the time you expatriated (not even necessarily have it paid off, just had a loan on it and *technically* it was yours) that's about $150,000 you now owe the IRS. Don't have the cash to pay that off? Then you must sell something quick, because if you don't pay it off right away then the US will have you extradited and sent to prison, because that law assumes that if you have X amount of assets and renounce your citizenship, then you did it for the purpose of evading taxes.
They quite literally tax you for money or even income that you may not even have. Furthermore, you're also subject to US taxation for a full TEN YEARS after you've renounced your citizenship.
http://en.wikipedia.org/wiki/E...
Careful with names containing L slashdot.org/~AiphaWolf_HK slashdot.org/~AlphaWoif_HK slashdot.org/~AiphaWoif_HK
This may have already been said - but I get the impression that people think this means that you're going to be taxed twice as an expat now.
Many countries already have double tax agreements so this doesn't happen, the US recognizes the tax you pay in a foreign country which offsets what you would've owed when you file in the USA. Lots of countries (NZ) have much higher income tax than that of the USA, so you end up paying no tax in the USA at all.
For example. You work and live in NZ. You earn $100k NZ (about $80k USD) per annum. In NZ you're going to pay 20-25% tax on that. You now file your taxes in America, the tax paid in NZ more than accounts for any tax you would have paid in America. You owe the IRS nothing.
This FATCA (as I understand it) is more about people holding money offshore and not declaring it, as opposed to trying to tax non-residents twice.
It might not be "about" expats, but it hurts them. I know - my wife is a dual Australian and American citizen. She hasn't set foot on US soil in a decade but still has to declare her worldwide (i.e. Australian) income every year and file her US tax return. Not only that, she has to report the details and balances of all her bank accounts, every year. And because some of those accounts are jointly held with me (a non-US citizen), then guess what, the US has my details as well.
Now with FATCA coming in (http://www.irs.gov/Businesses/Corporations/Foreign-Account-Tax-Compliance-Act-(FATCA)), the IRS is requiring foreign banks to determine which of their account holders may be American, and provide access to a record of transactions/balances for those accounts directly to the US! Needless to say, many banks are refusing to do this, either because it's administratively difficult (how are you going to figure out who is and isn't American unless you mass mail every single customer?) or because it breaches privacy laws in the relevant country. So many banks are simply refusing to deal with American customers and are requiring them to close their accounts.
No wonder record numbers of expats are renouncing their citizenship in recent years (~500 per month, last I heard). The whole concept of taxing non-resident citizens on worldwide income is ridiculous in the first place, and now these new laws just make it intolerable. It's not about us trying to avoid taxes - we pay our fair share and are not wealthy people. It's the administrative burden. Having to file so many extra returns, forms, etc, every single year, to a country you aren't resident in...
I thought about the idea of taking my SSI payout overseas in some 3rd world country where costs were 1/10th what they are in the US.
I found this is not allowed. If you payed into "your" SS account all your life, and expected to be able to withdraw on it after retirement age -- you could only do so in the US. Apparently, if you move overseas to retire -- you forfeit rights to money you paid into the system (at least while living abroad).
This is NOT about moving overseas and changing citizenship -- but is saying that US citizens can only receive US benefits if they remain in the US where SSI payouts qualify them for living under the US-poverty line.
What's up w/that? Of course many of the same supporters of such inane policies are also against paying benefits to those who immigrate into the US. The SSI rules are setup to prevent payouts to people who might move here to retire -- even if they become citizens, because benefits are based on money you pay in. So how can they justify NOT paying who live outside the US who did work?
If it wasn't the government doing it, it would be called fraud and theft...
But in the US, such things as fraud and theft are merely standard policy and law.
Make sure you google "Heart Taxation Act" first before you consider giving up your USA citizenship..... lol the fact that this law was written by Charlie "tax cheating" Rangel and this never gets mentions still continues to crack me up.
But the US is the ONLY country that taxes you on earnings you make overseas while in another country. I mean, not unless you make more than $90k USD a year, but you still gotta file.
I know the argument of "Well embassies" and all those other American benefits (like heath insurance..oh wait...)
NZ taxes your American retirement accounts after you've been here for four years, even if you're not a citizen (just a resident). Seriously? I've already paid taxes on my Roth IRA in one country and I have to pay takes in the future on my 401ks. What entitles NZ to any of that money? None of it was earned here?
Fucking taxes man.
New Zealand non-citizens can vote. It's one of the very few States in the world that allows non-citizens to vote.
Seriously.
New Zealand (like most democracies, in fact) does allow resident non-citizens to vote.
You do have to be a citizen to stand for election, though.
From what I skimmed over the article, they are trying to spin it as something other than it really is.
They aren't trying to tax people over there who live there, they are trying to get access to people who live in the US but have their money stashed overseas to avoid paying taxes on what they earned locally.
A while back they had a data leak given to a reporter that turned up between 18 to 32 TRILLION dollars in tax evasion, literally double the national debt stored offshore in tax havens to avoid paying taxes owed or launder money. THIS is what they are going after, not some mom and pop living overseas but something closer to the Walton's, General Electric, or Apple having a few billion stored in a safe haven to avoid taxes.
As much as I hate to say it, I honestly hope this goes through. I know it opens the possibility for abuse, the it closes far more abuses that are literally happening as we speak that are bleeding this nation drier than our leaders spending sprees by some of the most powerful people in it.
Then you move to round ups, guessing living in another country will not save you.
USA is one of the few countries that taxes you on income no matter where you earn it.
They can do it because you are a USA citizen and fall under it's laws and regulation. You can denounce your citizenship if you don't want to pay it; this tends to be reason you do get expats to denounce their citizenship if they can get it from another country.
Furthermore, you're also subject to US taxation for a full TEN YEARS after you've renounced your citizenship.
Not limited to just U.S. citizens. I'm a U.S. citizen living in Germany and I'm married to a German. Because my wife lived in the U.S. for about a decade with a green card, I understand that my wife who was never a U.S. citizen has to pay taxes for ten years. WTF? How is that even legal? Why does Germany put up with that? How can the U.S. demand that she pay taxes for ten years?
Maybe, perhaps, she can just "not pay"... but then they'll probably arrest her or me when we visit my parents.