U.S. taxpayers or foreign entities in countries that haven entered into the FATCA agreement with the U.S. are required to report their financial accounts in which U.S. taxpayers hold a substantial ownership interest. Trustees of U.K. charities are not required to report assets to the U.S. if they do not have holdings in the U.S. iexpats explains what charities that have a holding the U.S. need to do:
“Only charities with holdings in the US need to take action – which involves filing a Form W8 to certify that they are the UK equivalent of a US non-profit organisation.
“Charities registered outside the UK need to check that they do not fall foul of their home nation’s FATCA agreement with the US Treasury – this will apply to international charities with branches in several countries.
“If a charity trustee is a US citizen and signatory to a UK charity bank account, they may have to clarify this on their personal tax filing.”
Non-reporting can amount to tax fraud. Therefore, it is important for U.K. charities with holdings in the U.S. to report to the IRS. Many countries, including Switzerland have entered into an agreement with the U.S. under FATCA. iexpats speaks further about Canada, France and Singapore, the countries that are seeing changes due to FATCA.
“An open letter protesting about applying FATCA to US expats in Canada has gone to the Canadian Bankers Association from lobbyists the Isaac Brock Society and Maple Sandbox.
“The groups wrote: ‘We implore the Canadian Bankers Association to use its considerable influence and resources to insist that the Canadian government categorically reject Washington’s demands and to lobby for FATCA’s repeal by the American Congress.’”
These groups belive that FATCA is a violation of the rights guaranteed by law to Canadian citizens.
“‘Asking Canadians where they were born or about other citizenship violates Canada’s banking, privacy and human rights laws,’ Lynne Swanson, spokesperson for Maple Sandbox. ‘Changing those laws would violate Canada’s Charter of Rights and Freedoms.’
“The organisations claim 12% of Canada’s population would be adversely affected by FATCA.”
Iexpats reports further: “The US Treasury and French government have announced the signing of an intergovernmental FATCA agreement.”
“US Treasury and Singapore government officials have met to discuss signing a FATCA agreement.
“The Singapore government issued a statement confirming talks are ‘progressing well’ and both countries expect to sign an agreement soon.”
Tax evasion, which cause the U.S. government to lose billions in tax revenue each year, will be reduced because of strict implementation of FATCA. International organizations and individuals are now finding it difficult to evade taxes in the U.S. by using tax havens. It will not only help increase the annual revenue, but also bring down tax evasion considerably.