Financial liabilities such as double taxation have led to an unprecedented number of US expat nationals renouncing their pledge to the Land of Liberty. “I pledge allegiance to the Flag of the United States of America, and to the republic for which it stands, one Nation under God, indivisible, with liberty and justice (and double taxation) for all.” I’m confident that the oath didn’t read like that at any time, so why should American expats comply with the stringent tax laws of today?
Paying the taxes imposed by your home country whilst living half way around the world has got to be a difficult demand to meet for any of the 6m US citizens who are based abroad. Knowing that the US is the world’s only developed country to decree such a detrimental, somewhat prejudicial law can only prove dissuasive for those deciding on their residential future. It’s also worth noting that all this is before we’ve accounted for the IRS’ equally convoluted tax system.
Despite a $97k buffer on their homeland taxes, American expats can be penalised for failing to meet the requirements of The Report of Foreign Bank and Financial Accounts (FBAR). The document states that they must declare all overseas bank balances that exceed $10k, whether they’re joint accounts or otherwise, which is dubious considering the fact that US expats don’t benefit from any of the services offered back in their country of origin. And the worst is yet to come.
July 2013 will see the introduction of The Foreign Account Tax Compliance Act (FATCA), which requires banks abroad to restructure their current set-up, simply to share the account information of millions of Americans directly with the IRS. American Citizens Abroad (ACA) Director Jackie Bugnon commented on the new intrusive legislation: “… it’s the straw that broke the camel’s back … access to foreign financial institutions is being shut off and Americans abroad are treated like criminals”
Speak with a reputable, reliable and independent financial advisor with a proven history of dealing with global finance and expat enquiries to learn more about legislation such as that mentioned above. And always investigate your financial obligations before moving to another country; you may want to do that before July if you’re American. There’s a wealth of information available online.
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