It Pays Off to Have Your Offshore Account in The USA
A recent article, published on the Bloomberg View website, explains how the U.S. turned into the new tax haven for many wealthy individuals from around the world, successfully replacing well-known offshore account destinations like Bermuda, Switzerland and the Cayman Islands. Here’s what and how it happened in a nutshell:
- In 2009, 20 countries from the developed and developing world came together to think of a solution of the growing tax evasion problem associated with the secrecy provided by some jurisdictions. They agreed that financial institutions must reveal relevant information to the country authorities in relation to their citizens who have offshore accounts in those banks.
- In 2010, the U.S. Congress passed FATCA (Foreign Account Tax Compliance Act), requiring all foreign banks to disclose personal and financial information about U.S. taxpayers who hold offshore accounts with them. Just a handful of countries refused to comply.
- Years later, despite many attempts from the previous President and his administration, the U.S. still does not reciprocate the sharing of information with other countries.
- The U.S. has also refused to become a part of the Common Reporting Standard agreement, signed by over 100 other countries, which effectively turned the States into the new tax haven.
- A number of financial organizations like Rothschild & Co. and Trident & Co. have thousands of offshore accounts registered in the 3 most favorable states – Nevada, Wyoming and Dakota.
- The promotion of the USA as the new tax haven is also on the rise, being popularized and recommended as the best offshore accounts destination by top New York lawyers.
In summary, the U.S. has managed to persuade most countries around the world to disclose important financial information about offshore accounts of U.S. taxpayers, but get away with the refusal to provide the same standard for any other country whose citizens decide to open an offshore account in the U.S.
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