Doubtless, most US expats and Americans with financial interests overseas are by now familiar with the extra reporting obligations imposed on them by FATCA. But there is another obligation they face, with an acronym in the world of foreign account reporting that is already long-established: the Report of Foreign Bank and Financial Accounts, or FBAR. And penalties for even minor infractions of this requirement can be severe.Read More
Pearse Trust Blog
On 16 September 2015, the Federal Court of Canada denied a request for an injunction to prevent the collection and disclosure of Foreign Account Tax Compliance Act (FATCA) information to the United States regarding American citizens living in Canada.
In an opinion issued on 9 September 2015, the US Court of Appeals for the Second Circuit confirmed that the "economic substance doctrine" may apply to transactions involving foreign tax credits.Read More
A discussion draft has been released on legislation to create a European-style "innovation box" regime in the United States, to encourage domestic investment in research and development (R&D).
Lawmakers across the political spectrum in the United States are generally agreed that the tax code is in need of an overhaul. A comprehensive tax reform plan that both parties in Congress can rally around is proving very elusive, however.
A Complex Code
It has been less than 30 years since the last major simplification of the tax code, and the National Taxpayer Advocate says that the total time burden of tax compliance has reached 6.1bn hours. That is the equivalent of approximately 3.05m employees working 40-hour weeks year-round with just two weeks off. The total cost of complying with the tax code is calculated at USD224.3bn a year.Read More
In what appears to be the first challenge to the US Foreign Account Tax Compliance Act (“FATCA”), lawyers for Gwen Deegan of Toronto and Virginia Hillis of Windsor, Ontario say that FATCA exposes their clients 'to a deprivation of their liberty and security of the persons', in violation of Canadian Constitutional rights. FATCA applies to all “US persons”, which in itself is an expansive test and captures many groups of people that may not even realise they are “US persons".
Further to our previous blog on FATCA wherein we observed the postponement of the implementation dates for FATCA, the regime has now been implemented since July 2014.
Jurisdictions across the world are producing local legislation and guidance in order to implement FATCA on their home soil.
As part of the patent reform in the US, a new bill was introduced into the US House of Representatives on 22 July 2013. Its aim is to protect innovators from frivolous patent litigation brought by the increasing number of patent trolls, particularly in the technology industry.
Background To Latest Delay
Since 2011 we have written a number of blog posts on FATCA. In our blog post FATCA For The UK, we mentioned an implementation date of 1 January 2013. That date was later postponed to 1 January 2014. We highlighted this in our blog post FATCA – Implementation Deadlines and provided an overview of the key implementation deadlines following the release of IRS Announcement 2012 – 42. However, in July of this year, the US Treasury Department announced the further postponement of the withholding tax regime imposed by FATCA on foreign banks and other foreign financial institutions (FFIs) by six months until the 1 July 2014.
Further to our recent blog posts Does FATCA affect your business? and FATCA for the UK?, we are now able to provide an overview of the key implementation timelines for due diligence and other requirements under FATCA, following the release of IRS Announcement 2012-42.