Hong Kong Goes Swiss: Will Disclose American Worker Financial Data To IRS

Tyler Durden's picture

With Switzerland long dead as an offshore tax haven for US savers unwilling to fund Uncle Sam's central-planning machine (and who can blame them - isn't monetizing the deficit precisely what the Fed is for?) and with Cyprus banks, shall we say, compromised, many have been forced to look for greener tax-evading pastures, as far away as the Pacific Rim, especially that oasis of mega wealth creation, Hong Kong. Only this time the US is paying attention as SCMP reports that Hong Kong tax officials will soon be able to pass information about the finances of Americans working in Hong Kong to their US counterparts under an agreement signed yesterday as part of Washington's global crackdown on tax evasion. In other words, for tax purposes, Hong Kong is now effectively under IRS control.

Enter the FATCA: "The Financial Services and Treasury Bureau said the tax-information exchange agreement allowed the US to file a request to the Inland Revenue Department "under specified conditions". The Foreign Account Tax Compliance Act was passed in 2010. It takes effect in July. It requires foreign financial institutions such as banks to declare to the US tax authorities the foreign holdings of anyone liable under US tax rules."

SCMP has more:

The bureau said that provided the basis for a further agreement that would enable US tax authorities to seek information directly from local banks. Tax experts said the agreement was crucial for America's controversial anti-tax evasion law, which takes effect later this year.

 

If the institutions did not comply, the US tax authorities would withhold 30 per cent of their US-sourced income, according to Ivan Strunin, managing director of Deloitte's Asia Pacific International Core of Excellence (US Tax Service).

 

Without an intergovernmental agreement, financial institutions that provided the information might breach privacy laws.

 

Signed into law by President Barack Obama in 2010, the law was originally supposed to take effect on January 1 last year. That was postponed to January 1 this year and then to July 1.

 

Secretary for Financial Services and the Treasury Professor Chan Ka-keung said after signing the first agreement with US Consul General Clifford Hart that it demonstrated Hong Kong's continued commitment to fulfilling its international obligations.

 

"The [agreement] with the US has adopted highly prudent safeguard measures to protect taxpayers' privacy and the confidentiality of information exchanged," he said.

 

For the agreement to take effect, the Chief Executive in Council will have to make an order under the Inland Revenue Ordinance. The order will take effect unless the Legislative Council objects to it.

 

The Post reported earlier that Cathay Pacific planned to comply with the US law. Cathay pilots said they were concerned about privacy and were puzzled why companies in Hong Kong needed to comply with the regulations of a foreign country.

 

"How can Cathay give a foreign government our details without our permission? There is a good case [that this is] against Hong Kong [privacy] law," one American pilot said.

That said, Hong Kong falling under FATCA authority was long-expected, and we doubt many will be caught unaware. A bigger question is if the IRS will stretch its tax oversight tentacles as far as the real offshore bank haven, Singapore, a place that is far more near and dear to China as well. In a world in which the financial wealth tax is increasinglt becoming a reality, we are confident we will find out soon enough.

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SamAdams's picture

Note the pyramid on the IRS logo...  Trademark, International Banker's Association, AKA "The Triangle Club"

fonestar's picture

One more bonus for Bitcoin.  There's just no living person to report your coin holdings, supposing you store and manage your own wallets.

new game's picture

supose i could vaporize into a wallet and hide from the irs after i digitize my atoms. finally, somewhere to hide...

fonestar's picture

fonestar sees this is sarcasm but continue thinking along these lines.  Being able to digitally vaporize and hide your assets is a very powerful thing.

Dewey Cheatum Howe's picture

All it takes is one country to recognize any one of these crypto-currencies as a national currency.

Venice, Catalonia, Scotland anyone....

 

Dewey Cheatum Howe's picture

Problem with native americans and the micronation is they don't really have any industry or an economy for the currency to be used within their borders.

Iceland on the other hand shows promise. My understanding is the Icelandic government is actually supporting the experiment to see if it can work or not. I've been watching auroracoin for awhile now with interest. It has promise and if it takes off the smart money will flood into Iceland to make sure the economic infrastructure is in place along with the guns to keep out the democracy spreaders. One of these little upstarts is going to beat the odds, the question is which one. This is only the beginning as the taxman and bankrupt entities and their ass rape paper control schemes get more and more aggressive in their tactics the pushback is going to be the same.

Ex Cathedra's picture

What pyramid?  The official IRS logo is an eagle holding the scales of justice, with a wreath on the side.

Thought Processor's picture

 

 

Singapore is where much Loot hides now.  Would be surprised if they joined this party.

 

 

Thought Processor's picture

 

 

Also keep in mind that anyone with half a brain or any decent sized amount of money hides it in tax protected offshore Corporate accounts, not personal accounts.  This is a major attraction to doing financial 'transactions' in Singapore.

 

Boris Alatovkrap's picture

Maybe Singapore is able hide foreign loot, but is also able hide wide body passenger airliner!

agent default's picture

Singapore is a signatory of the OECD automatic tax information exchange agreement.  So lets get one thing straight here, if we want to be brutally honest.  Privacy within the banking system is dead globally. Obviously Switzerland and the rest of these countries that signed up for FATCA and the OECD standard will face a collapse once governments mandate capital repatriation from their subjects.  That's why the governments want personal information of depositors instead of going for anonymous taxation.  Have no illusions about this either. 

Of course by that time, Eveline Widmer-Schlumpf will have accepted a high paying tax free non job in the IMF/OECD whatever there is, and the will be Swiss stuck with a collapsing economy.  Same for Singapore, Lichenstein, San Marino , Andora, HK, you name it is over.  And any countries that do hold out will be threatened with military action in the future.  Go see what the Tax Justice [sic] Network and this Marxist piece of excrement right here http://www.taxresearch.org.uk/Blog/  advocate: 75% tax rate is the most efficient for government revenue.  That's where we are headed.

 

Got gold?

GET OUT OF THE SYSTEM NOW.

 

PS: For a site that claims to follow key financial developments, ZH was pathetically late on reporting this. 

 

SwissCake's picture

I am no fan of EWS, looks tough but acts weak. Has no internal credibility as the seat she hangs on belongs to the SVP.

But the trouble of our international strategy - the good old & weak "show good will and they will return the favor" - lies in Burkhalter, Leuthard (and Ammann), supposidely centre-right they've led us in the bushes and undermined our neutrality at every single occasion. Burkhalter is a social-democrat euroturbo, so is Leuthard (add manipulative). Ammann a passive slug. I am ashamed of this government, ironic that Sommaruga (socialist) is most respectable member of the 7.

They are so out of touch with the base that they've gotten setbacks out of setbacks from either the parliament or the people on plenty of internal/external projects. At the very least time to eject a FDP for a second SVP even if this won't change shit on the global stage.

The critic is spot on. We have lost our credibility on the global stage. We won't regain it. We de facto kissed US and EU feet with FATCA, the late bank agreement (the government went unconstitutional by allowing banks to give out names, and it wanted the parliament to vote a blind agreement, i.e. not knowing the content) and EU legislation alignments. Supranational laws and standards (OECD) are eating us while global powers are granted exceptions. This is so fucked up.

The respect premium we are fortunate to have out of the emerging world (e.g. Russia and China) is febrile. As late as last week our government decided to put a halt to the FTA we're negotiating with the Eurasian Union. Today this fucked up Burkhalter announces that we won't take on sanctions but we reserve the right to do so. In effect we already apply the EU sanctions like visa restrictions since we're in Schengen.

It is really fucked up to assist to those constitutional stretches and the ongoing weakening of our neutrality. I am feeling like a US tea party partisan seeing its constitution teared up by Washington. This government of ours is the weakest and most incompetent we have ever had.

firstdivision's picture

...is next on the list for various tax authorties from various countries to pressure. 

LawsofPhysics's picture

The oligarchs are really intent on making 'merica the next slave/penal colony aren't they...

 

But I digress, as many have pointed out, China/U.S. oligarchs have been on the same page since 1971 (thanks tricky dick).

Spitzer's picture

The only challenge to the unipolar American black hole is Putin.

We must support Putin.

LawsofPhysics's picture

Hell of a puppet show isn't it?

SamAdams's picture

That's right.  Obama is the face of another's voice, the same voice who controls China.  China has been in the hip pocket for a very, very long time.  Much before 1971....

Did you ever wonder if Putin is a figurehead?  Everyone says, "Putin did this, or Putin outsmarted that", but did he?

Dr. Engali's picture

Putin has his role in the grand play just as the rest of them.

new game's picture

behind the scenes a billion is still a billion, and i aint hangin with no millionaire!

SamAdams's picture

MAO - Yale in China...  Russel Trust, Delano's and Opium.  Geitner was born in Taiwan and speaks Chinese.  First job, Kissinger & Associates.  Kissinger negotiated free trade with China (aka export of thin-air inflation, close the gold window).  But, it goes to Mao and before, back to the opium wars.

agent default's picture

Russia's pressure was key in the introduction of the global tax information exchange standard.  You think that a KGB thorough bread gives a shit about privacy and rights?  We like Putin because we hate our scumbags more.  That's it.

UselessEater's picture

yeh its not just America, its all G20........'til its a one global tax regime (FATCA seems to be another US export we're all going to luv /sarc)

http://www.oecd.org/newsroom/oecd-delivers-new-single-global-standard-on...

"Responding to a mandate from G20 leaders to reinforce action against tax avoidance and evasion and inject greater trust and fairness into the international tax system, the OECD has unveiled today a new single global standard for the automatic exchange of information between tax authorities worldwide.

Developed by the OECD together with G20 countries, the standard calls on jurisdictions to obtain information from their financial institutions and exchange that information automatically with other jurisdictions on an annual basis. It sets out the financial account information to be exchanged, the financial institutions that need to report, the different types of accounts and taxpayers covered, as well as common due diligence procedures to be followed by financial institutions."

http://www.thenewamerican.com/economy/item/17337-globalists-exploit-new-...

http://www.thenewamerican.com/economy/item/17643-globalists-unveil-socia...

agent default's picture

The G20 is larger than you think, because it also includes a non state entity, the EU as a member.  So I presume that all EU members are involved at some level.

NoDebt's picture

Another Simon Black money destination goes down the drain.

He should make a list with all the "approved" money destination countries and put a little box next to each one.  That way we can check them off one-by-one as they fall to the Dark Side of the Force.

22winmag's picture

Like I've been staying, screw running away. Stay at home and fight in the trenches. Try and take as many of the bastards with you as you can.

UselessEater's picture

I'm curious, who is fighting in the trenches with you?

In Aust no one wants to know about this sh*te and I can't be bothered digging a trench by myself....

NoDebt's picture

It's metaphorical "fighting" and "trenches".  At this point anyway.  Later on, who knows?  Really depends a whole lot more on how desperate the government gets than how desperate we get.

UselessEater's picture

yeh get the metaphor... just pointing out (in frustration really) there are more shovels than hands and by the time people wake up this global tax, global govt, global bank one world order deal will be pretty tightly stitched.

NoDebt's picture

I'm with ya, 22.  I say stand and fight.  It's why I always take a swipe at Simon Black, "International Man of Mystery".  Unless you're moving to Antarctica, the world is running out of places you can just go and hide from the government.

It ain't gonna be pretty either way, but I think the chances of victory are much higher defending familiar terrain than unfamiliar terrain.

new game's picture

cross two state lines and you be in a place that aint home-trees funny, people talk funny and noone give a shit about you u nless you are pulling out your wallet. acorns don't roll a hundred miles for a reason....

Dr. Engali's picture

It seems every fucking balless country save one bows down to the empire these days.

A Lunatic's picture

If they don't we won't sell them our chicken. Tough choice eh..........?

q99x2's picture

Russia is looking better by the day.

SoilMyselfRotten's picture

Can you see it from your house??

williambanzai7's picture

I can tell you that Americans cannot open bank accounts in either country unless they consent to reports being sent to the IRS. Local banks already will not go near Americans. And no one anywhere, except TPTF banks, wants to manage assets for Americans.

So you wind up dealing with such paragons of lawfulness such as HSBC and Citi.

Singapore is generally the same way with respect to Americans. If you get cold called by a private wealth manager, all you need to say is I am American to scare him or her away.

NoDebt's picture

I think that's the real effect desired.  Go anywhere you want on the planet, but you're still going to deal with an IRS-approved bank in you're a US citizen.

 

Mercury's picture

[Human] Nature abhors a vacuum.

 

Isn't Russia looking to diversify its economy beyond natural resources?

new game's picture

seem like gold is still the answer to wealth stealth.

smacker's picture

ONLY if you acquire it without an audit trail(!)

dogismycopilot's picture

yes, i live outside the US and whenever some finance 'wealth' advisor calls me pimping his wares i just tell him, "Sorry, I am an American". they usually hang up on me!"

toadold's picture

Well even more Americans will give up their citizenship to avoid tax slavery.

If people can't trust banks anywhere they'll look for something else.  I'm going long  on back hoes, aluminum baseball bats, and the firearm industries. 

I look for Putin to set up tax havens next just to piss off Obama.

Disenchanted's picture

Instead of FATCA, it should have been FATCAT.

Colonel Klink's picture

Just add Tyrany to the act name, and you have it.

youngman's picture

Where are all the unemployed prop desk traders going to go????? so sad....so sad...I feel sorry for them..they cant find a safe country where they can steal freely

MarcusAurelius's picture

The problem is not finger pointing at the IRS or CRA or any other tax collecting boondoggle. It is the groups that are behind them that give them the power they have. These looters are the result of the boomers not saving enough and still wanting all the perks of all these ridiculous programs their parents put into place about forty years ago and kept adding to them until the present time frame. They are still the largest population group and they want entitlements that their parents got. Well someone has to pay for this and that someone is the millenials and the rich.
It will not stop without the the same kind of fight that brought them into play in the first place.

waterhorse's picture

"These looters are the result of the boomers not saving enough and still wanting all the perks of all these ridiculous programs their parents put into place about forty years ago and kept adding to them until the present time frame."

 

You mean the very programs that the boomers paid into all these years?  Fine.  Give them their money back then.  And frankly, who gives a flying FUCK if "the rich" have to pay for something for once.  The last time they paid their fair share was under the Eisenhower administration.