As if banking regulations were not enough, still a new tax law will go in effect to hurt foreign bank investors into the US.
The Florida International Bankers Association has a two-fold strategy to address new banking disclosure regulations that it says could hurt foreign depositors and also hurt Miami’s reputation as a hemispheric banking center.
The Florida International Bankers Association is not only working with U.S. legislators on a potential legal remedy that would delay or prevent the law from going into effect, but also reaching out to its own members to educate them so they can share the correct information with their customers as well as there client base. Changes are on the way.
The new tax rule, which goes iinto effect Jan. 1, requires all banks and financial institutions to report information to the Internal Revenue Service on non-taxable interest paid on accounts held by non-resident foreign nationals.
It applies to accounts that earn more than $10 in interest in a year. This absolutely will hurt some of the US banks. Investors will avoid the US.
Potentially such information could be shared with the account holders home countries raising privacy concerns among some international account holders.
Some also fear their home governments might make politically motivated requests for their bank information or that data indicating their wealth will leak out, bankers said.
It is UBS all over again. Everyone will have to take a deep breathe and see which way the dust will settle.
What will probably happen as a result.
Some depositors may move their money to jurisdictions such as Panama or the Cayman Islands or other safe havens that have stronger privacy laws.
FIBA has heard that several million dollars have left Florida for other jurisdictions since the new regulation was passed in April.
The U.S. banking and financial system is still the safest and soundest place in the world to put your money. There is a process by which the information is collected but not automatically exchanged with home countries. Everyone is looking for safe havens. The bottom line, no one wants to disclose and no one wants to be taxed.
It is the IRS that will make the determination on whether to release the information and only as a part of a tax evasion investigation or something of that nature.
Stay tuned for more on this in the future. It is always best to check with a strong and knowledgeable tax consultant. 1-866-700-1040
