Persons affected by FATCA tax treaty be left alone
Last summer, a client received a letter from their bank, a major German bank in which it was asked to indicate “whether you are a US tax or not” and also in the form of an affidavit (“Under penalties of perjury”) in to make English more detailed information about himself and, in the case of US citizenship or similar connections to the United States to indicate their “correct” US tax identification number or social security number. Should not fulfill the bank customer in the invitation of the Bank, it was the latter “no longer possible … to keep your accounts and deposits”. In “fundamental issues for US tax liability” may be the customer “, please contact your tax advisor or to the competent tax authority for you” call.
Background for the ominous writing the Bank was on May 31, 2013 signed the “Agreement on the promotion of tax compliance in international cases” short “FATCA Agreement” (FATCA represents the US “Foreign Account Tax Compliance Act”) between the Federal Republic of Germany and the USA. This agreement compels German banks under the sword of Damocles of the de facto exclusion from the lucrative US financial market, specifically defined data of persons who possess certain characteristics, to report on the German Federal Tax Office to the United States. The whole is exacerbated by the fact that the US is the only country in the world, the income tax itself of such citizens rises, which have no connection with the United States, except those that they are born there and that the double taxation treaty between the US and the Federal Republic of Germany itself German (dual) citizen does not take with food point in Germany prior to this practice in protection.
The client was born in the US, but moved away already in infancy of the United States and had since their sole center of life in Germany; they had no US taxpayer identification number or social security number, had no contact with US authorities or even a US tax consultant and had, moreover, not even the necessary language skills to the your no translation (!) sent English forms even begin to understand or they do fill what you otherwise would not have been possible in the absence of a US Social Security Number as well.
From its fully undeserved predicament, the client could only liberate that it relates to the – obviously from their bank “overlooked.” – Transitional provision in § 8 paragraph 5 of the German implementing regulation for FATCA Agreement (FATCA US-implementing Decree of 23 July 2014, I, p. 1222) convened after which the data requested in the letter the bank had not be brought before the calendar year 2017 and thus after the conditions of the Bank also were not allowed to be collected. (Because of the relevant breach of duty has made the client against the bank filed a lawsuit to recover its pre-litigation costs pending.) In the longer term will be looking for most such “troubled” dual nationality, the solution is formally on the US citizenship to renounce – even if the United States have increased in the meantime the remuneration vigorously for this waiver.
