Are Older Men in Thailand Trading Love for Financial Ruin

[OMGImInPattaya]

I was doing some research re FACTA compliance rules for foreign financial institutions and there is an exemption in the law for state-owned banks. Apparently, such institutions are not subject to the law (I.e., reporting on the accounts of American "persons." The article mentioned that the Chinese state owned banks would be big beneficiaries of this loophole but I'm wondering, I assume the same would hold true for the state owned commercial banks in Thailand, ,of which there are several. These banks could provide a alternative for Americans who wish to maintain their banking annonimity.

Anyone have any thoughts or further information on this?

[Soutpeel]

one suspects now this loop hole has been identified it will be closed post haste..

also understand Krungthai is the only state owned bank in Thailand

[OMGImInPattaya]

one suspects now this loop hole has been identified it will be closed post haste..

also understand Krungthai is the only state owned bank in Thailand

This "loophole" was deliberately written into the original law I suspect to maintain the principle of comity between nation-states. As government owned banks are essentially arms of their respective governments, if said banks were required by a US law to divulge information on their operations it wld be akin to Congress passing a law demanding that the People's Liberation Army disclose their plans for the defense of the Chinese mainland from an American attack, with some sort of penalty on the Chinese government for non-compliance. Obviously, this is an extreme example but the principle is the same. In reverse, what is to stop the Chinese People's Congress from passing a law demanding the U.S. Treasury disclose their future fiscal plans for the united states?

As you case, this is why state-owned banks are purposely exempt from the FACTA law...States can't pass laws demanding information from other States. Therefore, I don't think this provision will be changed.

[Soutpeel]

one suspects now this loop hole has been identified it will be closed post haste..

also understand Krungthai is the only state owned bank in Thailand

This "loophole" was deliberately written into the original law I suspect to maintain the principle of comity between nation-states. As government owned banks are essentially arms of their respective governments, if said banks were required by a US law to divulge information on their operations it wld be akin to Congress passing a law demanding that the People's Liberation Army disclose their plans for the defense of the Chinese mainland from an American attack, with some sort of penalty on the Chinese government for non-compliance. Obviously, this is an extreme example but the principle is the same. In reverse, what is to stop the Chinese People's Congress from passing a law demanding the U.S. Treasury disclose their future fiscal plans for the united states?

As you case, this is why state-owned banks are purposely exempt from the FACTA law...States can't pass laws demanding information from other States. Therefore, I don't think this provision will be changed.

Not really...they would be only asking for information on US citizens who have dealings/accounts with said banks....nothing to do with disclosure of fiscal plans at a goverment/national level and besides per your OP why do you need to maintain "banking annonimity" from your own goverment if you have nothing to hide ?...

[OMGImInPattaya]

one suspects now this loop hole has been identified it will be closed post haste..

also understand Krungthai is the only state owned bank in Thailand

This "loophole" was deliberately written into the original law I suspect to maintain the principle of comity between nation-states. As government owned banks are essentially arms of their respective governments, if said banks were required by a US law to divulge information on their operations it wld be akin to Congress passing a law demanding that the People's Liberation Army disclose their plans for the defense of the Chinese mainland from an American attack, with some sort of penalty on the Chinese government for non-compliance. Obviously, this is an extreme example but the principle is the same. In reverse, what is to stop the Chinese People's Congress from passing a law demanding the U.S. Treasury disclose their future fiscal plans for the united states?

As you case, this is why state-owned banks are purposely exempt from the FACTA law...States can't pass laws demanding information from other States. Therefore, I don't think this provision will be changed.

Not really...they would be only asking for information on US citizens who have dealings/accounts with said banks....nothing to do with disclosure of fiscal plans at a goverment/national level and besides per your OP why do you need to maintain "banking annonimity" from your own goverment if you have nothing to hide ?...

I think you missed my point completely. It doesn't matter that the law is "only asking for information on US citizens who have dealings [with the bank]." The issue is the US government demanding that a department of the Chinese government, the state owned bank, do something on the command of the United States. It is a matter of principle...where does it end and what's to prevent other governments demanding that departments of the US government perform demands at their behest.

I am pretty sure that is why the FACTA purposely excluded governnment owned banks and was not an oversite.

As to your latter comments, many people have nothing to hide...but are concerned that because of the costs of complience and the severe penaties for non/erroneous reporting it will become increasing difficult for Amricans to obtain banking services overseas. This should be a concern to any american living or working outside the united states

FACTA also requires extensive and intrusive reporting of not only one's income, but also one's assets. This goes far beyond reporting on and paying income taxes for resident Americans [where all that is required is info re one's taxable income].

[USNret]

Since you asked for our thoughts, I would simply say: Don't assume that whatever is confidential today will forever remain confidential. Expecting our governments to act in a reasonable, logical or predictable manner is an exercise in futility. If you earn interest income overseas, you are expected to pay U.S. income tax on it whether or not this income is reported by your banking institution to the IRS. You would be well advised to assume that sooner or later, the States will learn of your income. Act however you deem prudent.

[OMGImInPattaya]

Since you asked for our thoughts, I would simply say: Don't assume that whatever is confidential today will forever remain confidential. Expecting our governments to act in a reasonable, logical or predictable manner is an exercise in futility. If you earn interest income overseas, you are expected to pay U.S. income tax on it whether or not this income is reported by your banking institution to the IRS. You would be well advised to assume that sooner or later, the States will learn of your income. Act however you deem prudent.

Why do you presume that is not already the case? Why do you, and our dopey congressmen (something like 25% of whom don't even have a passport so have never traveled overseas) automatically assume people WHO LIVE OVERSEAS and thus have a foreign bank account have them to avoid taxes? Do you make the same assumption about people with bank accounts in the USA as well?

[livinthailandos]

I'll be watching this thread quite closely as this effects me. I even started another thread but with a different question though pertaining to this issue.

I have no problems reporting my stats to the irs as I've done ever year with the requirements needed but what my issue is, if banks not just here but else where as well decide that will all the costs of complience and the severe penaties for non report or erroneours reporting it, banks may decide to make it more difficult for US citizens to get a bank account or just decide its not worth it and deny us citizens all together.

[OMGImInPattaya]

Just a heads up, one of the two English language Bangkok newspapers has an extensive report on FACTA and Americans in Thailand, on the back page of today's business section.

[Trembly]

one suspects now this loop hole has been identified it will be closed post haste..

also understand Krungthai is the only state owned bank in Thailand

Apart from the Government Savings Bank and the Bank for Agriculture and Agricultural Cooperatives, both of which do retail banking..

Edited January 8, 2013 by Trembly

[Naam]

good discussions! but please... switch from FACTA to FATCA. ok?

[JSixpack]

one suspects now this loop hole has been identified it will be closed post haste..

also understand Krungthai is the only state owned bank in Thailand

Apart from the Government Savings Bank and the Bank for Agriculture and Agricultural Cooperatives, both of which do retail banking..

And Government Housing Bank

[MrRealDeal]

Since you asked for our thoughts, I would simply say: Don't assume that whatever is confidential today will forever remain confidential. Expecting our governments to act in a reasonable, logical or predictable manner is an exercise in futility. If you earn interest income overseas, you are expected to pay U.S. income tax on it whether or not this income is reported by your banking institution to the IRS. You would be well advised to assume that sooner or later, the States will learn of your income. Act however you deem prudent.

Why do you presume that is not already the case? Why do you, and our dopey congressmen (something like 25% of whom don't even have a passport so have never traveled overseas) automatically assume people WHO LIVE OVERSEAS and thus have a foreign bank account have them to avoid taxes? Do you make the same assumption about people with bank accounts in the USA as well?

They don't assume that anymore than they assume everyone who want's to buy a gun is crazy , they assume that a few people are doing it or a few crazy people will try and buy a gun and make everyone fill out the forms in an effort to stop the few who are breaking the laws. As far as the assumption and US accounts goes the same thing applys, but yes US banks report the intrest they give people to the IRS in any amount over 5 dollars and report transactions over 10,000 as well. Brokerages are required to report sales to the IRS So it's not as much of an anti expat thing as you think it's really more of just extending what is already done in the US to it's citizens overseas not singling them out to do something different. You could say the reporting of a bank account over 10,000 is different and it is, however under more normal banking rates US accounts would also be reported by virtue of the intrest it would generate over the year just reported by the bank instead of the bank account holder who because he would have to declare the intrest payments the gov with a little math knows how much the account is worth to a fairly accurate degree which is pretty much the same thiing just done in a different way. Edited January 8, 2013 by MrRealDeal

[manarak]

Let's set one thing straight: no bank outside of the jurisdiction of the USA is subject to any US Law.

There are many state-owned banks in Switzerland which are FATCA compliant, but this is not because FATCA applies to these banks, it is because the Swiss government agreed to submit to that Law because many Swiss banks derive income from the USA and are afraid of the USA's blackmail.

So there is no legal loophole.

In all cases, application of FATCA abroad depends on the agreement of the individual bank or country, which in turn depends on how dependent they are from the US financial market. No dependence = freedom.

[Trembly]

This law demands that foreign banks act as tax auditors for the IRS at their own expense. I have nothing against Americans but as a Canadian and a human being I sincerely hope that the Canadian government, along with all other governments, and ultimately the American people tell the IRS to <deleted> off . . .

. . . Not least because the IRS are threatening other countries with a whopping 30% withholding tax on all US derived payments for non compliance with FATCA. Seriously not cool and seriously not land-of-the-free.

This could apply to just about any other country (from a quick google) : http://maplesandbox....reject-fatca-2/ or http://isaacbrocksoc...ay-no-to-fatca/ (more detailed).

Is it too late for Americans to do anything about FATCA and FBAR? I feel that there is a severe violation of personal sovereignty going on here, let alone national sovereignty other countries.

Edited January 8, 2013 by Trembly

[Soutpeel]

I feel that there is a severe violation of personal sovereignty going on here, let alone national sovereignty other countries.

this has never stopped them before...

[Trembly]

I feel that there is a severe violation of personal sovereignty going on here, let alone national sovereignty other countries.

this has never stopped them before...

True, but in most cases it was because not enough people realised that they were being reamed and not enough mobilised to resist. Some even seemed to be thankful for the reaming. In any case I hope that this time round the knowledge deficit is small enough that the IRS are roundly told where to go . . .

Edited January 9, 2013 by Trembly

[JSixpack]

Let's set one thing straight: no bank outside of the jurisdiction of the USA is subject to any US Law.

There are many state-owned banks in Switzerland which are FATCA compliant, but this is not because FATCA applies to these banks, it is because the Swiss government agreed to submit to that Law because many Swiss banks derive income from the USA and are afraid of the USA's blackmail.

Probably all Swiss banks. Not the case here.

So there is no legal loophole.

In Switzerland from what you say. Switzerland.

In all cases, application of FATCA abroad depends on the agreement of the individual bank or country, which in turn depends on how dependent they are from the US financial market. No dependence = freedom.

Yep.

[manarak]

So there is no legal loophole.

In Switzerland from what you say. Switzerland.

FATCA doesn't apply outside US territory in the first place, how can something that doesn't apply have loopholes?

Or are foreign state-owned banks exempt of penalities?

Edited January 9, 2013 by manarak

[JSixpack]

So there is no legal loophole.

In Switzerland from what you say. Switzerland.

FATCA doesn't apply outside US territory in the first place, how can something that doesn't apply have loopholes?

Or are foreign state-owned banks exempt of penalities?

All I heard is "I am pretty sure that is why the FACTA purposely excluded governnment owned banks and was not an oversite." said here:

If that's true then govts needn't require application of the policy to state-owned banks--if it requires application; maybe it'll be left up to the bank.

Guess we'll have to wait and see.

[farang000999]

where can i find a summary of what is going on? will my bangkok bank account that was opened with a non immigration o visa be closed? what will happen to my thai wife who lives in the usa on a green card bank accounts?

[JSixpack]

where can i find a summary of what is going on? will my bangkok bank account that was opened with a non immigration o visa be closed? what will happen to my thai wife who lives in the usa on a green card bank accounts?

Do you mean Bankok Bank? Accounts will never be closed to Americans, don't worry. It's a major gateway. Investing in funds through the bank may be a different.story, however.

Your Thai is reported automatically in the USA on any USA accounts she holds. Surely her Thailand accounts were opened under her Thai ID number. Hence nothing to worry about on either score.