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The economy of the Cayman Islands, a British overseas territory located in the western Caribbean Sea, is mainly fueled by the tourism sector and by the financial services sector, together representing 50–60 percent of the country's gross domestic product (GDP). The Cayman Islands Investment Bureau, a government agency, has been established with the mandate of promoting investment and economic development in the territory. Because of the territory’s strong economy and it being a popular banking destination for wealthy individuals and businesses, it is often dubbed the ‘financial capital’ of the Caribbean.
Banking in Switzerland dates to the early 18th century through Switzerland's merchant trade and has, over the centuries, grown into a complex, regulated, and international industry. Banking is seen as emblematic of Switzerland. The country has a long history of banking secrecy and client confidentiality reaching back to the early 1700s. Starting as a way to protect wealthy European banking interests, Swiss banking secrecy was codified in 1934 with the passage of a landmark federal law, the Federal Act on Banks and Savings Banks. These laws, which were used to protect assets of persons being persecuted by Nazi authorities, have also been used by people and institutions seeking to illegally evade taxes, hide assets, or generally commit financial crime.
An offshore bank is a bank that is operated and regulated under international banking license, which usually prohibits the bank from establishing any business activities in the jurisdiction of establishment. Due to less regulation and transparency, accounts with offshore banks were often used to hide undeclared income. Since the 1980s, jurisdictions that provide financial services to nonresidents on a big scale can be referred to as offshore financial centres. OFCs often also levy little or no corporation tax and/or personal income and high direct taxes such as duty, making the cost of living high.
International taxation is the study or determination of tax on a person or business subject to the tax laws of different countries, or the international aspects of an individual country's tax laws as the case may be. Governments usually limit the scope of their income taxation in some manner territorially or provide for offsets to taxation relating to extraterritorial income. The manner of limitation generally takes the form of a territorial, residence-based, or exclusionary system. Some governments have attempted to mitigate the differing limitations of each of these three broad systems by enacting a hybrid system with characteristics of two or more.
Republicans Overseas (RO) is a political organization created in 2013 for United States citizens who are living outside of the United States. RO is recognized by the Republican National Committee (RNC), and by other affiliated groups, such as College Republicans. It operates in the majority of countries around the world where there are large numbers of United States citizen residents. Similar to political action committees (PAC) and Super Pacs; RO is a 527 political organization that operates as a corporation with specific interests of repealing the Foreign Account Tax Compliance Act (FATCA) and of generally representing Republicans living overseas.
Renunciation of citizenship is the voluntary loss of citizenship. It is the opposite of naturalization, whereby a person voluntarily obtains citizenship. It is distinct from denaturalization, where citizenship is revoked by the state.
Exchange of Information is an umbrella term which refers to international co-operation in the field of taxation through the exchange of information on taxpayers between tax authorities.
Emigration from the United States is the process where citizens from the United States move to live in other countries, creating an American diaspora. The process is the reverse of the immigration to the United States. The United States does not keep track of emigration, and counts of Americans abroad are thus only available based on statistics kept by the destination countries.
An expatriation tax or emigration tax is a tax on persons who cease to be tax-resident in a country. This often takes the form of a capital gains tax against unrealised gain attributable to the period in which the taxpayer was a tax resident of the country in question. In most cases, expatriation tax is assessed upon change of domicile or habitual residence; in the United States, which is one of only three countries to substantively tax its overseas citizens, the tax is applied upon relinquishment of American citizenship, on top of all taxes previously paid. Australia has "Deemed disposal tax" which in essence is exit tax.
Multiple/dual citizenship is a person's legal status in which the person is at the one time recognized by more than one country under its nationality and citizenship law as a national or citizen of that country. There is no international convention which determines the nationality or citizenship status of a person, which is consequently determined exclusively under national laws, that often conflict with each other, thus allowing for multiple citizenship situations to arise.
The Foreign Account Tax Compliance Act (FATCA) is a 2010 U.S. federal law requiring all non-U.S. foreign financial institutions (FFIs) to search their records for customers with indicia of a connection to the U.S., including indications in records of birth or prior residency in the U.S., or the like, and to report such assets and identities of such persons to the United States Department of the Treasury. FATCA also requires such persons to report their non-U.S. financial assets annually to the Internal Revenue Service (IRS) on form 8938, which is in addition to the older and further redundant requirement to report them annually to the Financial Crimes Enforcement Network (FinCEN) on form 114. Like U.S. income tax law, FATCA applies to U.S. residents and also to U.S. citizens and green card holders residing in other countries.
The Reed Amendment, also known as the Expatriate Exclusion Clause, created a provision of United States federal law attempting to impose an entry ban on certain former U.S. citizens based on their reasons for renouncing U.S. citizenship. Notably, entry can be denied to persons who renounced their U.S. citizenship to avoid paying income taxes. The United States is one of two countries in the world that taxes its citizens' income earned abroad for citizens whose primary residence is abroad. The other country to do so is Eritrea.
The FATCA agreement is an international agreement signed between Canada and the United States that allows the implementation of the Foreign Account Tax Compliance Act in Canada. It is one of 30 intergovernmental agreements the US has concluded with other countries to implement the FATCA.
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The Common Reporting Standard (CRS) is an information standard for the Automatic Exchange Of Information (AEOI) regarding financial accounts on a global level, between tax authorities, which the Organisation for Economic Co-operation and Development (OECD) developed in 2014.
An accidental American is someone whom US law deems to be an American citizen, but who has only a tenuous connection with that country. For example, American nationality law provides that anyone born on US territory is a US citizen, including those who leave as infants or young children, even if neither parent is a US citizen. US law also ascribes American citizenship to some children born abroad to a US citizen parent, even if those children never enter the United States. Since the early 2000s, the term "accidental American" has been adopted by several activist groups to protest tax treaties and Inter-Governmental Agreements which treat such people as American citizens who are therefore potentially subject to tax and financial reporting requirements – requirements which few other countries impose on their nonresident citizens. Accidental Americans may be unaware of these requirements, or their US citizen status, until they encounter problems accessing bank services in their home countries, for example, or are barred from entering the US on a non-US passport. Furthermore, the US State Department now charges USD 2350 to renounce citizenship, while tax reporting requirements associated with legal expatriation may pose additional financial burdens.
Allison Christians is a tax law scholar and the H. Heward Stikeman Chair in Tax Law at the McGill University Faculty of Law/Faculté de Droit in Montreal, Quebec, Canada. Her research and teaching focus on Canadian and U.S. domestic and international tax law and policy issues, with an emphasis on the relationship between taxation and economic development and on the role of government and non-government institutions and actors in the creation of tax policy norms.
Under United States federal law, a U.S. citizen or national may voluntarily and intentionally give up that status and become an alien with respect to the United States. Relinquishment is distinct from denaturalization, which in U.S. law refers solely to cancellation of illegally procured naturalization.
International tax planning also known as international tax structures or expanded worldwide planning (EWP), is an element of international taxation created to implement directives from several tax authorities following the 2008 worldwide recession.
Panama has a substantial financial services sector. The sector grew up providing trade finance for trade passing through the Panama Canal, and later evolved into money laundering for the drug trade under Manuel Noriega.
References
- ↑ Obituaries of Warren Furth and Andy Sundberg https://www.americansabroad.org/about-us/meet-the-team/in-memory/
- ↑ It is difficult for an average congressperson to understand the concerns of an overseas voter, who appears only in small numbers in his/her district. A dedicated representative for overseas voters, though, could better take the time to understand concerns such as those of children born overseas in binational marriages or the physical presence test.
- ↑ A sample News Update can be seen at https://www.americansabroad.org/news/new-tax-simplification-for-americans-abroad-act-of-2023-hr5432-introduced-into-congress/
- ↑ Cohn, Michael (February 21, 2012). "Expats Press Capitol Hill for Tax Reforms". Accounting Today .
- ↑ as documented in the ACA Press Kit in PDF, https://www.americansabroad.org/media/files/files/ae902b3b/ACA-press-kit-2015.pdf
- ↑ Taxation Issues https://www.americansabroad.org/education/issues-facing-americans-abroad/taxation/
- ↑ Side-by-side Analysis of Residency-Based Taxation https://www.americansabroad.org/files/649/
- ↑ Knowlton, Brian (May 9, 2012). "Change to Ballot Request Form Angers U.S. Expats". The New York Times .
- ↑ Bachmann, Helena (April 20, 2010). "Why More U.S. Expatriates Are Turning In Their Passports". Time . Archived from the original on April 22, 2010.
- ↑ Bachmann, Helena (31 January 2013). "Why Americans Working Abroad Are Ditching Their U.S. Citizenships". Time . Retrieved 11 March 2013.
'FATCA is the straw that broke the camel's back,' says Jackie Bugnion, director of American Citizens Abroad (ACA), a Geneva-based expatriate advocacy group. Because this legislation forces local banks to invest in expensive new infrastructure in order to comply with the IRS rules, 'access to foreign financial institutions is being shut off and Americans abroad are treated like criminals,' she adds.
- ↑ Report of the Americans in Switzerland Working Group, September 2012, http://pegasus.thomasruddy.org/wp-content/uploads/2014/10/final_arawg2.pdf
- ↑ Wallace, Ellen (14 February 2013). "US-Switzerland sign controversial Fatca agreement (update)". GenevaLunch news. Archived from the original on 2 March 2013. Retrieved 11 March 2013.
One of the groups, American Citizens Abroad, which is based in Geneva, says it 'continues to combat the negative effects of the Foreign Account Tax Compliance Act (Fatca). In December 2012, after meetings with the Treasury Department and in a follow up letter, ACA pressed for the inclusion in Intergovernmental Agreements (IGAs) and in the recently finalized FATCA regulations of provisions incentivizing Foreign Financial Institutions to avoid discriminating against Americans. Treasury has included this language in most of the new IGAs and the provision has found its way into the final FATCA regulations.'