海角大神

Offshore bank accounts: no Americans allowed

Wealth management firms the world over are declining to open offshore accounts for Americans.

In a piece for Bloomberg, reporter Sanat Vallikappen begins, 鈥淕o away, American millionaires.鈥� 聽聽Valliikappen then goes on to explain that wealth management firms the world over are declining to open offshore accounts for Americans.

鈥淚 don鈥檛 open U.S. accounts, period,鈥� said Su Shan Tan, head of private banking at Singapore-based DBS, Southeast Asia鈥檚 largest lender, who described regulatory attitudes toward U.S. clients as 鈥淒raconian.鈥�

It hadn鈥檛 been easy for Americans doing financial business overseas, but since the 2010 passage of the Foreign Account Tax Compliance Act, known as Fatca, which seeks to prevent tax evasion by Americans with offshore accounts, opening a foreign bank account has become mission impossible.

Valliikappen writes,

The 2010 law, to be phased in starting Jan. 1, 2013, requires financial institutions based outside the U.S. to obtain and report information about income and interest payments accrued to the accounts of American clients. It means additional compliance costs for banks and fewer investment options and advisers for all U.S. citizens living abroad, which could affect their ability to generate returns.

The Institute of International Bankers and the European Banking Federation said in an April 30 letter to the IRS, that the 400 pages of rules and regulations issued by the American tax authority create Unnecessary burdens and costs.鈥�

Massachusetts Democrat Richard Neal says the government needs to crack down on offshore tax dodgers. 聽Mr. Neal wants tax money and doesn鈥檛 care much about privacy and all that.

鈥淧eople should know, and the IRS should know, what money is being held offshore and for what purpose,鈥� Neal said. 鈥淚 don鈥檛 think there鈥檚 anything unreasonable about that.鈥�

One young gentleman that believed Rep. Neal and the other thieves on Capitol Hill to be a bit too greedy and unreasonable is Eduardo Saverin, the billionaire co- founder of Facebook Inc. 聽Before Facebook does its public offering, and the price of Facebook stock is quoted daily, making Saverin鈥檚 wealth undistributable, he decided to his American citizenship and head for Singapore.

Bloomberg reports,

Saverin, 30, joins a growing number of people giving up U.S. citizenship, a move that can trim their tax liabilities in that country. The Brazilian-born resident of Singapore is one of several people who helped Mark Zuckerberg start Facebook in a Harvard University dorm and stand to reap billions of dollars after the world鈥檚 largest social network holds its IPO.

Singapore doesn鈥檛 have a capital gains tax. It does tax income earned in that nation, as well as 鈥渃ertain foreign- sourced income,鈥� according to a government website on tax policies there.

Saverin has to pay the U.S. government an exit tax but doing it before the IPO was wise. 聽Renouncing your citizenship well in advance of an IPO is 鈥渁 very smart idea,鈥� from a tax standpoint, said Reuven S. Avi-Yonah, director of the international tax program at the University of Michigan鈥檚 law school. 鈥淥nce it鈥檚 public you can鈥檛 fool around with the value.鈥�

There are a few Mises Institute supporters who have paid the American exit tax and now live in Singapore. 聽None I鈥檝e spoken with regret it.

鈥淚t鈥檚 a loss for the U.S. to have many well-educated people who actually have a great deal of affection for America make that choice,鈥� said Richard Weisman, an attorney at Baker & McKenzie in Hong Kong. 鈥淭he tax cost, complexity and the traps for the unwary are among the considerations.鈥�

While Mr. Neal chases away taxpayers, the only ones left will be tax eaters.