08/09/20

US: Republican group calls on Donald Trump to change Fatca.

As published on international-adviser.com, Monday 7 September, 2020.

Political group representing Americans abroad has sent a letter to the White House asking to change the Foreign Account Tax Compliance Act (Fatca) and the US taxation model.

Republican Overseas said in the letter to the US president to “consider remedies for the harms done to Americans abroad via onerous regulations such as Fatca” and to “end citizenship-based taxation” by changing the definition of ‘individual’ in the US tax code to ‘resident of the USA’.

The legislation requires all American citizens living overseas to pay tax on their foreign income to the Internal Revenue Services (IRS). Their foreign financial institutions fall under the act’s remit as well, as they are bound to share citizens’ financial data with the taxman.

Many people have turned to renouncing to their US citizenship altogether, but for some this is an expensive process as it requires them to pay $2,350 (£1,779, €1,987).

France-based activist group Association of ‘Accidental’ Americans (AAA) has managed to raise €20,000 (£17,905, $23,644) through its campaign to fund a legal action against the US to challenge Fatca as “unconstitutional”, and against the “expensive” costs associated with renouncing US citizenship.

The word ‘accidental’ refers to people who have acquired US citizenship either by being born in the country, but who have never lived there, or from their parents.

Fabien Lehagre, president of the AAA, said in a post on his LinkedIn page: “Thanks to the generosity of 260 donors, I announce that the lawsuit we will be bringing against the US Department of State early next year is fully funded.

“I thank you for your confidence and will be sure to come back to you soon to give you more details about the upcoming legal action that the AAA will launch on European soil against Fatca.”