American expatriates living abroad must be prepared for the upcoming FATCA changes in Germany and Norway. US citizens and green card holders should read What is FATCA to learn about the general FATCA guidelines. In January 2013 the United States have started to negotiate an intergovernmental agreement with Norway to implement the US Foreign Account Tax Compliance Act. On February 22, 2013 the German Ministry of Finance announced that it has initialed the IGA with the USA.
The Norway-US agreement is the seventh FATCA agreement to be signed or initialed that is followed by the Germany-US agreement. . The U.S. signed FATCA agreements with the UK in September 2012, Mexico in November 2012, Denmark in November 2012, Ireland in December 2012, Switzerland in February 2013. Moreover, the US announced Foreign Account Tax Compliance Act discussions with more than 50 other countries and jurisdictions.
What are the key features of the FATCA with Norway?
- The intergovernmental agreement between the USA and Norway is based on the reciprocal Model I template. This IGA will facilitate and decrease the cost of the FATCA process for financial institutions.
- Per this Foreign Account Tax Compliance Tax Agreement, the Norwegian financial institutions will be required to report the information about accounts held by US taxpayers. On a reciprocal basis, the US will provide the information about specified financial assets maintained in US financial institutions by Norwegian taxpayers.
What are the major principals of the FATCA agreement with Germany?
- German financial institutions will report the information about financial accounts of US customers to German authorities. So German authorities with share this information directly with US authorities.
- US financial institutions will send the information about US-source dividend and interest income of German residents to German authorities.
- German financial institutions will not be required to sign separate FATCA agreements with the US tax authorities because all information will be reported directly to German authorities. It minimizes the cost of FATCA compliance for foreign financial institutions.
Both Foreign Account Tax Compliance Tax agreements will be signed in 2013. The era of non-compliance and offshore tax evasion is coming to an end so American expatriates are encouraged to file past due returns and become compliant.
American expatriates must realize that FATCA is spreading across the globe. The Caribbean Community announced its steps to comply with FATCA. The Chilean Association of Banks and Financial Institutions sent a letter and requested the adoption of the FATCA IGA agreement.
American expatriates who need help with past due expat tax returns, FBARs, FATCA, foreign corporations, foreign LLC, foreign partnerships, foreign trust and other overseas tax issues must consult an expat tax CPA that provides international tax services. International tax experts at Artio Partners are here to help you with US tax preparation and other foreign tax issues.