FSC focuses FATCA talk on govt agreement

  I read with interest your recent story on FATCA. There has been so little on this subject coming out of Australia, I was pleased to see you discussing it here. Although I am not for sure that a single country exception or even an IGA is the answer, as the differences between Australia and U.S. taxing systems, IE, Territorial vs Citizenship, still cause complex problems that an IGA does not solve.

I am somewhat surprised it is taking Australian officials so long to respond. Both New Zealand and Australia have been amazingly placid in opposition to the incredible extra territorial overreach which FATCA is. It is totally unreported in the Australian media, unlike the secret TPP (Trans Pacific Partnership) talks which does get some coverage. FATCA impacts could be as dramatic and expensive to the Australian economy as TPP. More so, for your financial Services industry.

I read the ABA letter in response to the FATCA draft regulations and the comments at the May 15th Public hearings. Did you? Here is a link if you are interested. http://bit.ly/LoUaUz I would have thought that the ABA would have just remained in town and kept lobbying then, not waiting until the final regs are about to come out.

Your PM has a love affair with Obama, so maybe she should be calling in the "Darwin U.S. Marine base" chit to force the IRS to back off Super funds. Send them packing, as you don't need them. They just bring trouble anyway.

That said, even if you get these Super funds 'deemed compliant', you still have the issue of your own Human Rights and Constitutional laws that will probably have to be amended if you are to search out and turnover all account data for "U.S. Persons" (including Green Card holders and accidental American babies born in the US or to dual citizen parents), to the International Revenue Service (IRS).

Make no mistake about it, this search is for more than just U.S. Citizens resident in America.

End of Part I, part II to follow:

  Part II.

The Canadian Bankers Association (CBA) is struggling with these issues in Canada. http://bit.ly/NA79m9 Maybe that is because there are so many dual US / Canadian citizens living in Canada, and you don't have so many down under. However, if you add up all those that could be deemed 'U.S. persons' living in Australia, there may be many more than you realize. You could have similar issues.

Understand, unlike Australia, America takes to itself the right to tax U.S. persons around the world no matter where they reside! That includes Australians who have dual U.S. Citizenship living in Brisbane, Sydney or Whoop Whoop outback Australia.. If they are resident in Australia, America wants their taxes to help with the U.S. deficit. So taxing them in Australia is a direct transfer of financial wealth from Australia to the U.S. Treasury. Have you considered that?

What would America think if Australia tried to extract tax revenues out of Australians who are long time resident in America? You know the answer. They would not like it!! In fact, in the case of Eritrea, which has a 2% citizenship tax on Eritreans in America, they condemned it in an UN resolution! http://bit.ly/MN0CAc Go figure!

I hope this helps you see that there is more to this FATCA story than just Super funds. I trust you will expand your coverage on the coming impacts to Australia Financial Industry. You are being asked to take on a big cost because America can not / will not construct a reasonable homeland tax regime and pay for its own profligate spending without reaching into the Australian treasury. Why do you have to pay for this? This is not "fair dinkum"!

Thank you for your consideration.

Hope this meets your standards for publication. If not, I hope you will give the comments some consideration in future stories. Thank you again.

  Couldn't agree more with Martin. The U.S. does not respect the retirement arrangements in Australia and insists on taxing the pensions (tax-free in Australia) and the earnings of super funds at 15%. I am stunned at the compliance of governments around the world who could, by refusing to cooperate, bankrupt the U.S.

There seems to be no understanding of the need to fight the unjust treatment by the U.S. of its own expatriate citizens and also, more astonishingly, other sovereign nations that are being compelled to inform on its own (dual) citizens in order to please the U.S. American citizens who have lived and worked in Australia will be bankrupted by the draconian penalties for not reporting their retirement funds as "bank accounts" and will be thrown on the mercies of Centrelink, even though they followed Australian urgings to self-fund their own retirements.

The double-taxation (even triple and quadruple taxation) of American citizens living abroad needs to be brought to the attention of all citizens of Australia who recognize what it means to give people a "fair go".