Governments Worldwide Adopting FATCA Style Legislation

It seems the US has created a new model for the world of draconian taxes and penalties. New powers at HM Revenue and Customs (HMRC) in Britain allow the body to “raid the bank accounts” of anyone who owes more than £1,000 in tax or tax credits. Under the new system, HMRC would have the power to seize money from bank accounts after they contacted the debtor several times.

The tax authority will not be able to empty these individuals’ accounts, as they will have to leave a minimum of £5,000 in the account.

“This brings the UK in line with many other tax authorities which already have the power to recover debts directly from an individual’s account, such as France and the US,” the Budget documents explain.

So, HMRC is seeking the green light to raid UK bank accounts, potentially depriving people of any means to live. The HMRC does not have a stellar service record, and many people in Britain worry about abuse of power and incompetence from the government agency.

The changes are written down in the most recent budget package for the British government, in which a paragraph states “The Government will modernise and strengthen [the tax agency’s] debt collection powers to recover financial assets from the bank accounts of debtors who owe over £1,000 of tax.”

There is no reason to keep your savings in UK banks. Or in Russia for that matter.

Russia’s Ministry of Finance (Minfin) published last week draft amendments to the nation’s Tax Code relating to the taxation of foreign companies controlled by tax residents of Russia. It is basically the Russian version of FATCA (Foreign Account Tax Compliance Act) – an all-encompassing tax regime aiming to bring Revenue to the Russian government via legal corporate and investment entities outside of Russia. They even have a name for this new regime: “de-offshoring.”

China has also pledged to make international efforts to fight “tax base erosion and profit shifting” by moving funds to low-tax jurisdictions.  This is all part of the G20’s pledge to combat the global practice of shifting funds to low-tax jurisdictions to evade taxes. 

Despite the quickly changing tides, we still believe the US will see the brunt of the draconian taxation measures as the US is the most-indebted nation with multiple wars on different fronts and a leviathan government capable of snooping on anyone worldwide and with the ability to coerce other nations to hand over American assets.

Clearly, it doesn’t matter where you are in the world — governments, probably yours, are thinking about or already drafting legislation to tax income based on nationality and not on location.

The fact of the matter it is growing daily more difficult to keep up with what you owe on your taxes. This, for the most part, doesn’t matter where you live in the world. Governments govern by consensus, not by the people, but of each other. As I wrote earlier the G20 has pledged to crackdown on individuals and corporations from offshoring themselves in order to save their money from being gobbled up by the taxman. 

We see this most dramatically in the US, where in less than 100 days FATCA will be the law of the land. I predict thousands of people will be caught in the US dragnet known as FATCA, and many will be caught out of mere confusion regarding the law.

But, one thing is for sure, the press arm has made it clear: evading taxes is bad. That means that those people who make honest mistakes won’t have very much recourse to a sympathetic peer-group. Instead, they will be seen as “dirty capitalists” who don’t contribute to “the greater good” by those blinded by the two-party system of extortion and violence. 

But it isn’t too late to understand the law, and in particular the way the law is on your side. Believe it or not there are still great opportunities for you to organize your life in order get the most out of your income. And what’s more, all of these strategies are legal. That’s right – legal ways for you to save what is rightfully yours so that it can be passed onto future generations.

I do urge you to act quickly, however.  Once you have internationalized and protected your financial affairs it will be nearly impossible for governments to seize those assets.  But, it is becoming very clear that governments worldwide will be attempting to clamp down on their own tax slaves by any means possible.  The sooner you structure yourself, fully legally, internationally the better because it will not get any easier from here.

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Andrew Makarik

to@welovecostarica.com

Andrew Makarik is the main editor of WeLoveCostaRica, a fan of this sunny country. He is also a loving husband and a has a lovely daughter. By being a devoted family man and the biggest Costa Rica fan, he wants to make more people feel at home there. WeLoveCostaRica unites people and helps them find new home or a new travel destination. This website is a friendly community where everyone can find not only information, but also new friends and travel pals. Andrew is also passionate about IT and programming, so he himself maintains a friendly atmosphere in this cozy environment of WeLoveCostaRica.com.