05/31/2015 - Mark Nestmann on US Foreign Investment Taxation
Special Guest: Mark Nestmann – Lawyer, International Taxation Law
After establishing a noted career in international investment, Mark Nestmann left the US for three years to study for his “Master of Law” (LL.M.) degree in international tax law at the Vienna University School of Economics and Business Administration in Vienna, Austria. This is an indication of the seriousness and rigor with which Mark tackles issues in International Taxation for his high net worth clients. He shared his views with the FINANCIAL REPRESSION AUTHORITY in this exclusive interview.
FOREIGN ACCOUNT TAX COMPLIANCE ACT – FATCA
Passed in 2010 and hidden as part of a “Military Pensions Act”, no one fully understood what it meant or paid much attention to it.
“The Foreign Account Tax Compliance Act, is one of the most arrogant and one-sided laws ever passed by Congress. The idea behind FATCA, which Congress enacted in 2010, is simple: Demand that other countries enforce America’s imperialistic tax laws. And do so by the confiscation of foreign assets, if necessary.” – Why FATCA Is a Train Wreck Waiting to Happen – Mark Nestmann
“What is happening is foreign financial institutions (which is defined very broadly in the act) under the law are required to identify their US clients and force their US clients to self identify and turn over information to the IRS.”
“If the banks or countries don’t comply then 30% of their US source income (and in some case 30% of source gross sales revenues) of things like stocks, bonds, CDs etc are withheld – this is a pretty big number! The only way banks can avoid the 30% withholding tax is to essentially act as unpaid IRS informants.”
“Not surprisingly, FATCA and numerous other laws that require FFIs to enforce US money laundering, anti-terrorism, and securities regulations have led most of these institutions to fire their US clients. Perhaps one in 10 – and possibly fewer – non-US banks still permit US citizens or permanent residents to open accounts. That leaves little choice for Americans but to deal only with banks that have agreed to toe the IRS line.” – Why FATCA Is a Train Wreck Waiting to Happen – Mark Nestmann
“Non US persons investing in the US are also effected by FATCA. If their foreign bank don’t comply their US investment is whacked 30% as well – It isn’t just Americas who should care about this but basically everyone in the world!”
This is not a good time to have unreported financial accounts in countries that have already signed FATCA agreements with the US, or are about to. If you’re in this situation, you might want to seriously consider retaining a tax attorney to enroll you in the IRS’s latest Offshore Voluntary Disclosure Program.
PASSIVE FOREIGN INVESTMENT COMPANY – PFIC
“PFIC is another aspect of Financial Repression and aspect of regulatory restrictions on investment choices.”
“If you have an investment vehicle registered outside the US the IRS will consider it a PFIC. As an example of the way this tax is very unfavorable is that unless an offshore Mutual Fund qualifies as a US Mutual Fund when you sell it (or deemed to sell it) you have to file not only a return on the income by also a “throwback” interest charge for EVERY YEAR you held the fund. Additionally the tax rate is computed at the highest marginal rate in that year!”
“What happens is that people who held offshore mutual funds for a long period of time windup losing every penny of income in that fund because it is paid out in taxes and interest penalties.”
… there is much, much more in this 26 minute video interview covering:
- CITIZENSHIP TAXATION (including the absurdity of 1986 Tax Legislation for “Mars”??)
- UNOFFICIAL CAPITAL CONTROLS NOW IN PLACE,
- US 2008 “EXIT TAX” (for citizens and Green Card holders on unrealized gains),
- INHERITANCE IRS TAX GRABS,
- THE NEW EX-PATRIOT ACT,
- INVESTING ABROAD,
- THE RATE OF ACCELERATION OF RESTRICTIVE FOREIGN CHOICES FOR AMERICANS,
- THE GROWING MOVEMENT TOWARDS SECOND CITIZENSHIP PROTECTION,
- WHY THE LEGAL ABOLISHMENT OF CASH IS COMING.
