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[Marcoregano]

This is the article that got me a bit worried - it was in last week's South China Morning Post. It seems to suggest that pension funds (MPF) and even individual bank account details should be disclosed. It seems totally outrageous to me - like something from George Orwell's 1984.

US expats give up passports over tax fears

May 25, 2009
The US government's decision to crack down on its citizens who fail to report their foreign bank accounts has been widely condemned as being discriminatory and anti-competitive by many expatriate Americans, and some have given up their US passports as a result.

The disclosure requirement, which is not new but has not been strictly enforced until now, applies to personal and company bank accounts with a total combined value of at least US$10,000 at anytime last year, including those over which the US taxpayer has control but no financial interest.

This means a local company with an American chief financial officer who can sign cheques will have to reveal its bank account details to the US government. The bank details must be filed with the US Department of the Treasury by June 30 or the taxpayer may be liable to a maximum fine of US$500,000 and up to five years behind bars.

"The US Congress and the president are trying to collect tax wherever they can," said Alan Seigrist, vice-chairman of the Hong Kong chapter of Republicans Abroad. "Overseas Americans and businesses are an easy target as these taxes won't affect the domestic voter base.

"This is a very cynical grab for cash. It will result in the effective destruction of competitiveness of American companies doing business overseas. They will never collect the money they think they will, and American influence abroad will be whittled away."

The US Internal Revenue Service recently told members of Congress that about US$300 billion was not being collected from cash businesses in the US, and overseas Americans who were not paying taxes on their investments and other income.

Representatives of both Republicans Abroad and Democrats Abroad plan to raise the issue with House Speaker Nancy Pelosi when she visits Hong Kong this week.

Glenn Berkey, chairman of the local chapter of Democrats Abroad, said: "Needless to say, Democrats Abroad is not real happy with any idea that might make a company reluctant to hire an American for any job. Another danger is that it will make law-abiding Americans less likely to volunteer to serve as anything that would give them signing rights - say, treasurer of AmCham, head of their child's school's parent-teacher association or a person responsible for office petty cash - because of the added burden it places on them when they file their returns."

Evan Blanco, who chairs AmCham's tax committee, said the tough stance by the US government was unlikely to persuade Americans with something to hide to come clean but would probably catch many law-abiding taxpayers who might be unaware of the disclosure requirement. Even a tax adviser Mr Blanco spoke to was unaware that Mandatory Provident Fund accounts should be disclosed under the requirement.

The aim of the policy was to identify those taxpayers using undisclosed foreign bank accounts to avoid paying taxes, a US consulate spokesman said.

But under US tax law, a taxpayer who surrenders his US passport can still be taxed on any unrealised gain if his net assets, including property, were worth more than US$2 million, said Berin Chan Ding-bong, a partner at PricewaterhouseCoopers International Assignment Services (Hong Kong).

The decline in asset values because of the global crisis and recent slide in stock prices had convinced a number of Americans to give up their US passports, Mr Chan said.

[Doyle]

[quote="Marcoregano"]This is the article that got me a bit worried - it was in last week's South China Morning Post. It seems to suggest that pension funds (MPF) and even individual bank account details should be disclosed. It seems totally outrageous to me - like something from George Orwell's 1984.

Marcoregano,

Thanks for posting that. Actually, my accountant from the US sent me an email last week requesting information about my accounts here. She wanted the bank name/address and the highest value of the accounts during 2008.