By Mark Nestmann • January 20, 2015
FATCA, otherwise known as the Foreign Account Tax Compliance Act, is one of the most arrogant and one-sided laws ever passed by Congress. I first wrote about it in this essay.
The idea behind FATCA, which Congress enacted in 2010, is simple: Demand that other countries enforce America’s imperialistic tax laws. And do so by the confiscation of foreign assets, if necessary.
Spearheaded by President Obama, who has promised to shut down “offshore tax havens,” FATCA arrogantly presumes that “foreign financial institutions” will enforce US tax laws. And if they fail to do so? Any US-source income they have in the form of interest, dividends, rents, and similar payments are subject to a 30% withholding tax.
The definition of a “foreign financial institution,” or FFI, is very broad and includes banks, broker/dealers, insurance companies, hedge funds, and private equity funds.
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