Guest kjun12 Posted June 3, 2011 Posted June 3, 2011 In 2013 the Capitals Control Act which is part of the HIRE Act will go into effect. As I understand it, his law will require that 30% funds which you transfer from the US to another country must be withheld by the bank receiving such funds. It is anticipated that these funds will then be transferred to the IRS as a type of withholding tax. You will then have to file documentation proving that you have paid tax on transferred funds. Quote
firecat69 Posted June 3, 2011 Posted June 3, 2011 Find it hard to believe that there will not be a minimum like $10,000. Paperwork would be enormous otherwise!! Quote
Bob Posted June 3, 2011 Posted June 3, 2011 There is a lot of misleading information about this law floating around the internet. The law was passed in 2010, doesn't apply to accounts less than $50,000.00 in value, and basically doesn't affect accounts where the account holder reports the same to the US Treasury (which we're already required to do). The only people that have to worry about the effect of this law are people who are illegally hiding offshore money and/or who are not reporting to the IRS monies earned from offshore investments. My only concern for some is that some foreign financial institutions might choose to not allow US depositors or account holders because of the reporting requirements imposed on those banks but my guess is that most of that will be sorted out without affecting 99% of us. Quote
2lz2p Posted June 3, 2011 Posted June 3, 2011 I agree with Bob. There are reporting requirement imposed on foreign banks that may decide to not want to bother with it and not allow US citizens to hold accounts - it will all be dependent upon how the Regulations implementing the law are written. That said, my guess is that Bangkok Bank will follow whatever reporting requirements are imposed as they have a Branch operating in the USA. But, stay tuned. . . Quote
Guest voldemar Posted June 3, 2011 Posted June 3, 2011 I agree with Bob. There are reporting requirement imposed on foreign banks that may decide to not want to bother with it and not allow US citizens to hold accounts - it will all be dependent upon how the Regulations implementing the law are written. That said, my guess is that Bangkok Bank will follow whatever reporting requirements are imposed as they have a Branch operating in the USA. But, stay tuned. . . I do not want to spoil my vacations to go in detailed discussion of this devastating bill. I wrote about it in great detail before on this message board. Though the bill itself got bipartisan support, may I suggest for every expat to check how their congressman and senator voted in this case and make sure to vote against those who supported that bill. This is due to people like senator Levine (Michigan) who made this thing happen... I would like to briefly comment only on what was posted in this thread. The foreign financial institutions (FFI) which accept new conditions imposed by this bill may very well close all US persons accounts as it was indicated. If they choose not to close US accounts, the transfers from US to accounts of these FFI will not be subject to 30 percent withholding taxes. For FFI which will not accept new conditions there will be a lot of penalties. In particular, there will be 30 percent NONREFUNDABLE withholding tax. The statement that new bill will not affect accounts with less than 50000 US is total nonsense. These accounts will not be subject to new reporting requirements (true) and therefore people who have such accounts in fact will have no trouble with IRS (even) if they violated all US laws which right now require reporting with 10000 US in agregate. However, your account will still will be closed if FFI decides to get rid of US persons accounts and your transfer will be subject to 30 percent withholding nonrefundable tax if FFI will not accept new conditions. Sorry, if my post is not very clear: try to read the bill. If you are not the lawyer who is expert in these issues you will not understand a word. That is one of the reasons why lawyers like government regulations: it gives them the lucrative jobs... Quote
Bob Posted June 3, 2011 Posted June 3, 2011 As 2lz2p indicated, the regulations haven't even been written yet and everybody can believe who they want [heck, I was just reading a story this morning in the paper about a woman who wants to sue the pastor because the world didn't end on May 21st as he promised (she had given away all of her savings just prior to May 21st)]. If you're not a US citizen, not your problem. If you're one of the millions of US citizens who have offshore accounts, I don't believe you have to worry either (so long as you annually report when all those accounts exceed $10,000 in value at any time during the reporting year)as the regulations will surely take into account that most of those accounts are perfectly legitimate. And the big foreign banks aren't going to want to lose the business. Or, possibly, not (the referenced pastor now says that the world will definitely end this coming October). Quote
Guest voldemar Posted June 3, 2011 Posted June 3, 2011 The discussion of this law makes me really sick because it is absolutely devastating. I, in fact, had a correspondence with Washington based law firm (which I strongly suspect participated in writing this law) which explained to me a lot of details. I will give you just two examples to explain what kind of idiocy is encoded in this law. 1. Suppose that you are US tax evader who wants to avoid the reporting requirements imposed by this law on participating FFI. The only thing you need to do is to make sure that you do not keep more than 50000 US equivalent with each FFI. Even if FFI enters the required agreement , it does not need to report a thing on your account. (see, however 2). 2. Somebody suggested that Bangkok Bank will probably enter the required agreement. Suppose this is the case. Suppose , further that Bangkok Bank allowed US pesons to keep their accounts. According to the law the bank should assume the role of withholding agent for IRS. In other words, say, you have your bank account with Bangkok bank and you buy a condo in Thailand. You need to transfer your money to the Thai realtor who has the account with other Thai bank. Suppose that this other bank did not enter the required agreement with Department of Treasure. Then Bangkok bank should withhold 30 percent from your transfer (from your account in Bangkok Bank to Thai realtor account) and transfer funds to IRS. Now, I cannot imagine ANY foreign bank will want to deal with such a headache. The natural question then how US government or big US corporations are going to operate in such a crazy environment. They are exempt! All US government accounts and all accounts of publicly traded US corporations are exempt from the requirements of this law. I am telling you this law is quite something and I wish more Americans could start paying attention to what is really going on... Quote
