France Should Consider Abandoning FATCA, Parliament Report Says
(Bloomberg) -- France should renegotiate its FATCA tax treaty with the U.S. and consider unilaterally pulling out if it can’t win concessions to protect dual nationals, a French parliamentary report said.
FATCA, or the Foreign Account Tax Compliance Act, was passed in 2010 and forces banks wanting to operate in the U.S. to report any assets held by American citizens overseas. France signed up to FATCA in 2013, creating problems for many American expats and dual nationals who have since been rejected by retail banks seeking to avoid hassle and risk.
The parliamentary report, which was co-written by a deputy from President Emmanuel Macron’s party and one from the center-right opposition, calls on the government to try to limit the application of FATCA to those above certain income or wealth limits, and to better align French and U.S. tax law to avoid double taxation.
“In the case of failure of these negotiations, we should envisage unilaterally pulling out of FATCA and restricting the transfer of information,” the report says.
It also calls on regulators to forcefully remind banks that they can’t discriminate against clients on the grounds of nationality or having links to the U.S.
France’s parliament agreed to take up the issue after lobbying by an association of so-called “Accidental Americans” who have been caught up in a law intended to combat tax fraud but that has ensnared many ordinary citizens who just happened to be born in the U.S. or have an American parent. In some cases, they were not even aware they were American citizens until being informed by their banks.
The European Banking Federation, which sent a delegation to Washington, D.C., earlier this month to discuss its problems enacting FATCA, estimates there are about 300,000 accidental Americans in Europe.
The Conseil d’Etat, France’s top administrative court, has heard arguments about whether France’s application of FATCA is constitutional but has yet to render its opinion.
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