Can the EU help Accidental Americans? Americans Overseas spoke extensively with the Member of the European parliament Sophie in ’t Veld about the debate in the EU that was followed by a vote to express the EU dissatisfaction with FATCA.
Can the EU do something about FATCA and Citizen Based Taxation?
The answer is yes and no;
NO, MEP Sophie in ‘t Veld explains the EU doesn’t hold the power to make fiscal laws, that’s up to the individual countries. Furthermore, Citizen Based Taxation is an American system and up to the Americans to change. Regarding FATCA the EU commission also stated that it’s not a EU matter because all the EU countries made their own agreements with the US.
YES, The EU can help when it infringes on EU legislation so it’s a question of the right framing. The EU recently were able to make a case for ‘Accidental Americans’ calling FATCA a breach of the new data protection law GDPR. Also having a bank account is an EU right so any bank refusing is in violation. In the wake of this debate the unfairness of Citizen Based Taxation is also constantly mentioned. Sophie in ‘t Veld and other members of the EU parliament have vouched to also broach the subject with their US counterparts on every trans-Atlantic meeting.
Is FATCA a breach of GDPR (General Data Protection Regulation)?
Sophie in ‘t Veld states that technically it’s not a breach. Banks are not allowed to export information to outside parties without the permission of their clients. The US however found a clever way around this. They made deals with all individual countries with so called IGA’s (Intern Governmental Agreements). The countries receive the information from their banks and then hand it over to the US. So technically the banks are not in violation because it’s one government to another. However, this is twisted and should be looked into says Sophie in ‘t Veld.
What happened with the EU vote?
The EU voted in a large majority on the topic of FATCA. Sophie in ‘t Veld explains that this was a political vote and not a legislative vote. This means that the EU has made a statement by voting saying they’re not happy with the current state of affairs however no measures are being implemented.
In ‘t Veld strongly proposes to replace all the individual country agreements with one agreement between the EU and the US. She states that collectively the EU is bigger then the US and able to push back.
Will EU countries act?
Historically, she explains, EU countries tend to be extremely submissive to the US and that needs to change. She mentions the example of Eritrea and the EU, the only other country in the world imposing citizen based taxation. When Eritrea tried to tax its citizens living in the EU, the EU did push back immediately so it’s illustrative of the relationship they don’t dare to do the same with the US.
Also, the agreements between the countries and the US also illustrate the submissive relationship. All agreements have a clause that always overrules any law in any EU country if it’s in conflict with a US law. This means US laws always supersedes the law of an EU country. Another demonstration of the American European relationship.
In ‘t Veld says that the current political climate could actually be positive in showing EU countries that the Americans are not always geared towards doing good and should be reined in.
What can individuals do?
In ‘t Veld explains that the starting point is for individuals to contact their national politicians and preferably organize themselves to speak with one vote to their national governments. The national governments can then in turn instruct their EU representatives to raise the subject politically and work on legislation. So far only the Netherlands and France have been putting the matter on the agenda actively with their governments.
Should US persons wait with US tax filing?
Chances of the EU convincing the Americans to change their tax system are very very slim’ Sophie in ‘t Veld says. Furthermore, EU laws can’t protect citizens from US tax laws. In ‘t Veld advices people to seek proper advice and she reiterates again the need for also informing national governments.
What can individuals do if the bank closes their account?
The possibility to have a bank account is an EU right In ‘t Veld explains so one should demand that their bank complies with that law. However, no EU provisions have been made for pension, investments, mortgage accounts and other products so the banks can close those off unfortunately.
What about the Americans?
To be frank, the Americans don’t care, it’s not their problem In ‘t Veld says. She also points out that most American citizens don’t even know about all these laws and don’t care. It’s not an election topic for any politician so therefore not high on the agenda.
Where do we stand now?
There has never been more media attention as now for FATCA and CBT. The EU has spoken out and several EU members are determined to continually inform their US counterparts on these problems. Also, recently influential American lobbyists and politicians have spoken out against the damaging effects of FATCA. Experts agree it’s a long way to go but the more attention the better. As Sophie in ‘t Veld reiterates it’s now more important than ever to make your voice heard to your own government preferably as one collective voice.
What is the role of Americans Overseas (AOS)?
Americans Overseas has created awareness among local, national and EU government officials as well as banks and other financial institutions by constant lobbying and also reaching out to the press. Currently with the help of the EU members Americans Overseas want to create awareness in Germany. Americans Overseas feels that if Germany also makes its voice heard in the EU that might be another step in the right direction.
Americans Overseas helps US citizens in Europe wit US tax requirements
Americans Overseas informs local and European parliaments about the effects and problems European citizens have with these (recently) enforced laws.
We started this initiative to help people from all over the world by providing proper information to avoid unnecessary panic, and offering help free of obligation and free of charge. If needed, we have a network of affordable professionals (accountants) who can help you with your tax obligations.
If you have more questions about the consequences of FATCA and CBT on European-American citizens and EU debate you can contact us at Americans Overseas.