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Government Privacy United States Your Rights Online Politics

NZ Govt May Gut Privacy Laws For US Citizens and Ex-Pats 134

Posted by timothy from the oh-you-didn't-buy-the-premium-package? dept.
Master Moose writes with an excerpt from stuff.co.nz indicating that New Zealand's government "wants to override privacy laws to supply the U.S. Government with private details about Americans living in New Zealand. As part of a global tax-dodging crackdown, the U.S. is forcing banks and other financial institutions to hand over the private financial details of U.S. 'persons' and companies based overseas. From July this year, Kiwi banks and insurers will be required to provide U.S. tax authorities with American customers' contact details, bank account numbers and transaction history. The move comes amid continuing criticism of New Zealand's participation in Trans Pacific Partnership Agreement talks, aimed at securing a wider-reaching free trade deal with the U.S. and other countries. Critics say the secretive talks could restrict New Zealand's ability to make its own laws on everything from the environment to employment."
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NZ Govt May Gut Privacy Laws For US Citizens and Ex-Pats More

NZ Govt May Gut Privacy Laws For US Citizens and Ex-Pats

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  • OK (Score:4, Informative)

    by koan ( 80826 ) on Tuesday February 04, 2014 @09:36AM (#46149433)

    On 23 May 2012, United States Senator Ron Wyden (D-OR) introduced S. 3225, proposed legislation that would require the Office of the United States Trade Representative to disclose its TPP documents to all members of Congress.[77] Wyden said the bill clarifies the intent of the 2002 legislation which was supposed to increase Congressional access to information about USTR activity, but which, according to Wyden, is being incorrectly interpreted by the USTR as justification to excessively limit such access.[78] Wyden asserted:
    “ The majority of Congress is being kept in the dark as to the substance of the TPP negotiations, while representatives of U.S. corporations—like Halliburton, Chevron, PHRMA, Comcast, and the Motion Picture Association of America—are being consulted and made privy to details of the agreement. [...] More than two months after receiving the proper security credentials, my staff is still barred from viewing the details of the proposals that USTR is advancing. We hear that the process by which TPP is being negotiated has been a model of transparency. I disagree with that statement.[78]

    http://en.wikipedia.org/wiki/T... [wikipedia.org]

  • In Roman Times (Score:1)

    by Anonymous Coward
    Back when the Roman Empire was THE power, you could cross the Danube into "barbarian lands" or exercise other options for getting away from punishing taxes and oppressive laws of the late Empire. In the American-dominated world, you are rapidly running out of those kinds of options.

    • Re: (Score:3)

      by swb ( 14022 )

      Well, feel free to cross into barbarian lands of Russia, North Korea, various parts of Africa, etc.

      You won't pay tribute to the US, but you will still pay tribute, just as you would have paid tribute to the barbarians if they didn't just slaughter you outright.

      • Re: (Score:1)

        by Anonymous Coward
        Flag-waving morons like you can't accept that maybe America is not acting like the beacon of freedom and liberty that it used to be. There's going to be a day when it is more repressive than any other nation on earth and that day is getting closer and closer, if not already here. Highest rate of incarceration in the world, average person commits multiple crimes a day without realizing it, a militarized police, one of only two nations in the world that claims the right to tax profits made abroad, massive e

        • Re: (Score:2)

          by swb ( 14022 )

          Blinded by your outrage at the US, you fail to understand that I'm not defending the constant meddling and overreach of the US government.

          I'm merely pointing out that it's no picnic in any place you might decide to 'escape' the US government. Do you think that Putin does not demand tribute and fealty? Perhaps the experience of Mr. Khodorkovsky might be illuminating.

        • You forgot that we now torture people, too.

    • You can still avoid US taxes by moving to another country, renouncing your US citizenship, and not returning to the USA (border controls are even more annoying for former US citizens than for those of us who have never been US citizens, and that's saying something).

      • Re: (Score:2)

        by PRMan ( 959735 )
        According to the law, you can return for up to 30 days every year. I don't know how hard the border police will make it on you though.

      • They won't let you renounce citizenship if the embassy official thinks you are doing it for tax reasons. Even if they don't think that, they charge a giant "exit tax" and can levy fines for previous non-filings (even if you were, e.g. born to a US parent but never actually lived there).

        Basically US citizenship is a modern form of slavery. The scary thing, from my perspective as a non-US citizen, is that once FATCA infrastructure is in place, there's really nothing to stop them extending the list of criteria

        • Re: (Score:2)

          by snadrus ( 930168 )

          The battle cry for starting America: "Taxation without Representation".
          With a nearly-worthless vote since "representatives" simply won't honor their (non-corporation) constituency, we are right back to the first problem.

  • Speaking as an American (Score:2, Interesting)

    by Anonymous Coward

    As an American that has traveled and lived abroad, I can state with some authority that it is often quite nice to be an American when traveling. (This was pre-2K, so there are, ahem, some differences now.) When living abroad I paid my local and home country taxes. It wasn't that difficult. It was very nice, to be honest. As an American, you get a big fat deductible for your tax returns. And the local taxes weren't that bad either.

    That said, the intrusiveness and 'do as I say, not as I do' attitude of

  • Consider this... (Score:3)

    by New Breeze ( 31019 ) on Tuesday February 04, 2014 @10:08AM (#46149733) Homepage

    One of the reasons companies move overseas is to avoid US taxes on anything they don't bring back to the US, why should actual citizens be any different?

    I decide to move to NZ in my retirement. After a lifetime of working sitting on the porch and watching life go by isn't for me so I start or buy a local business. I hire local employees and pay all the required taxes in NZ for the income made there. I pay US taxes on my retirement income derived from US accounts. Why if I'm not sending money back to the US for deposit (which would have to be reported) does the US need to know anything about income derived from the NZ business?

    • Re: (Score:3)

      by epyT-R ( 613989 )

      Because the elite there want a piece of your action.

      • Government is voracious. If a budget is balanced, elected officials quickly unbalance it to buy more votes. The "local maximum" in the political landscape is to run a permanent deficit because you gain more votes that way than with a balanced budget.

        It takes an unexpected windfall like the Internet boom to briefly balance the budget. But have no fear! Congress quickly rises to the occasion!

      • Well yes, but by what stretch of the imagination do people believe this money grab is right? I see multiple posters agreeing with it. For the tax jurisdiction the business is in anyone can see the point, you're operating a business there like anyone else.

        I'm at the age where retirement is in sight and have spent a lot of years bitching about US taxes. I've definitely considered moving somewhere that won't take 50+ cents of every dollar I earn, the thought of owning a beach bar in a tropical location not

    • All you need to do is renounce your US citizenship and become a Kiwi. Job done.

      This treaty is for people who want to have their cake and eat it.

      • This treaty is for people who want to have their cake and eat it.

        This has NOTHING to do with "having the cake and eating it", as you said in in your boundless ignorance.

        Ordinary US citizens who happen to be living in other countries, like NZ. They don't ask anything of the US, they don't have accounts there, they earn an honest living in their adopted country. No "Fat Cats", no tax cheats, nothing sinister going on. Yet, contrary to almost all civilized countries in the world, the US demands those people to continue to report and file their taxes in the US, forces them t

        • Re: (Score:2)

          by gonzo67 ( 612392 )

          So you want to keep having the privilege of maintaining the ability to come and go to the US, and do not wish to pay for that privilege?

          As you need to earn 6 figures to worry about paying US taxes on your overseas income, this compaint is rather esoteric. ANd, if you wish to avoid US taxes on your overseas earnings, you can do as the one rich kid did to avoid taxes and renounce your US citizenship.

          • You still need to fill out the forms to prove that you do not earn 6 figures and therefore should not be taxed. Your bank and employer still need to provide information to the U.S. government that they may not want to disclose (and thus it is easier for them to say "you can't bank here" or "you can't work here"). This continues *even after renouncing your citizenship*. The forms are both more complex than the domestic version, *and* you're in a country where 99.9% of tax preparers have no experience with

          • So you want to keep having the privilege of maintaining the ability to come and go to the US, and do not wish to pay for that privilege?

            Only crazy, totalitarian states would make you PAY "for the privilege" to return to your home country to which you still hold a passport. What world do you live in?

            A free (!) country lets its citizens go and does not give them a hard time about it.

            Freedom? Have you heard of it?

          • Sorry, but are you nuts?

            In no other country on earth does maintaining a right to "come and go" require payment. That's the whole point of citizenship. Why should an American have to renounce that when anyone else in the opposite situation (retiring in America, but originally from somewhere else) would not have to do any such thing?

            Also there are numerous situations where expat Americans are liable to pay tax to the US without making six figures. And in some cases, situations where they get double taxed on t

        • BS. If you are a US Citizen there are services available to you all over the world. If you REALLY want to be in NZ living like a New Zealander, paying NZ taxes, never voting in USA elections, and totally renouncing any benefit from the USA then do the simple thing and be a citizen there. Also note that unless things changed, your *first $90,000* of income are tax free if earned abroad. Not a bad chunk of change.

          • Are you dense on purpose?

            As many other posters already pointed out: It has nothing to do with paying more or less taxes. It has to do with (a) having complex and complictaded filing requirements, (b) risking heavy criminal fines for even the smallest mistakes, (c) being treated like a criminal even with no wrong doing, (d) suffering disadvantage for employement, banking, business opportunities because of this, (d) the US again appearing like an arrogant bully on the international stage.

            You seem to think tha

          • 1. You assume that it's easy to become a citizen of another country just because you want to. They aren't handed out like candy you know. There are usually set criteria, and these may not be possible to meet.

            2. Gaining NZ citizenship wouldn't affect the US citizenship, which would still exist. Renunciation of US citizenship is expensive and the IRS will STILL require you to file for up to 7 years after doing so.

            3. The $90k threshold doesn't apply to all income types. Furthermore, in many countries, retireme

            • NZ does if you return at all within 5 years. (IOW you never left if that is the case)

              Not as draconian but not quite as black and white as you are making out.

              I don't know about other countries.

      • Re: (Score:2)

        by PRMan ( 959735 )
        I don't think you CAN become a Kiwi very easily. They don't just take anyone who wants to live there, you know.

    • One of the reasons companies move overseas is to avoid US taxes on anything they don't bring back to the US, why should actual citizens be any different?

      Come again? The differences are huge. Companies are hardly punished for avoiding taxes. In fact, tax offices make special deals with them. This means that somehow the law does not apply to multinationals. Maybe that is why they want to do a crackdown on individuals. Just to show that, despite evidence of the contrary, they seem to be fighting tax evasion.

      • Here's the thing - the IRS can, and should crack down on tax evasion (i.e. nonpayment of tax in violation of the law). It can't, however crack down on tax avoidance (the legal structuring of one's affairs to reduce tax owed). Multinationals are engaged in large-scale, and entirely legal, tax avoidance. We can work to change the law, thereby closing off the avenues of avoidance, but criticizing the IRS for not going after things like Apple's tax avoidance structures is like criticizing cops for not ticket

      • My point was that companies are almost encouraged to move operations overseas to avoid taxes as you indicate, however the US now wants to involve the financial industry around the world in making sure that any "US Persons" report and pay taxes on any income earned from overseas business or investments.

        My contention is that individuals should be treated the same as the multinationals.

    • This is just so that they can ensure you are doing what your post says you're doing. This is so that if they audit you they can actually verify your balances and ensure you aren't just hiding money from the IRS. Bank accounts are subpoena'ble records, they aren't private. But subpoenaing international records is tricky--hence treaties.

  • Precedent (Score:5, Insightful)

    by gmuslera ( 3436 ) on Tuesday February 04, 2014 @10:22AM (#46149861) Homepage Journal

    New Zealand is playing the role of US puppy, as proved the Kim Dotcom house raid [torrentfreak.com], breaking their own laws [techdirt.com] in the process as anyway the priority was coming from outside.

    You won't fix US attitude from outside, and if you really want to run, don't do it to one of its own colonies.

  • Progressives in the US want to "tax the rich" and don't want to let them get off the hook by moving abroad. This kind of worldwide tracking and enforcement is the inevitable consequence.

    European nations just let their wealthy move abroad and don't tax them when they're living outside the country. They also don't count them in inequality statistics, which is one reason why European Gini indexes are so low. Maybe a good dose of this kind of European-style progressivism would do the US some good?

  • Effects on all Americans overseas, not just NZ (Score:5, Informative)

    by Anonymous Coward on Tuesday February 04, 2014 @11:12AM (#46150421)

    I am an American living and working overseas for over half my life. My ties to the U.S. are almost none-existent. My use of U.S. goods and services is possibly even less than many foreigners around the World. Occasionally I might buy a U.S. made product, but that is even rare given the poor quality.

    Here are the real effects, and this is just a short list I have time to type.

    1. Assumption that all Americans overseas are criminals by definition, even if we did not owe any taxes. The IRS, by their own calculations, says the basic forms will take over 72 hours a year for an American Expat to prepare to properly report their taxes. Most expat tax experts, can not figure them out.

    2. Foreign banks are closing or will refuse to open accounts for Americans. I know dozens of real cases already among friends. It is not just American citizens. It is anyone with a U.S. mail address, green card, or any payments transiting the United States to foreign banks. So, yes, many, many none Americans are caught up in this sweep of private information, the majority of which has nothing to do with tax money.

    3. The country I live in also has banking secrecy and privacy laws, and as a full resident, it even goes further because in the country where I live it is a constitutional right extended to both residents and foreigners.

    4. It also includes any company where an American might be a 10% owner or more, or might have signature authority over the company accounts or other assets. Just think what most international companies are going to do when making a choice between an American employee or CEO vs. a foreigner, as far as disclosing private company information to the U.S. government simply because they have an American working there.

    5. It includes disclosing foreign none-citizen none-resident private information to the U.S. government that are family members of an American citizen abroad. For example, a wife or kids account, investments, or pretty much anywhere the American might (you have to prove the negative) have authority over the money . Partnerships of all forms, of all sorts of complexity, are also subject to it. Imagine as a foreigner entering in to a contract with an American citizen, and having to report to the U.S. IRS your private information and dealings. Guess what most foreigners will do from now on to avoid such problems.

    6. This includes not only bank accounts, but investments, pensions, insurance policies, various types of contracts. I am not even sure how many insurance policies I have, let alone what would need to be reported. If you are a foreign insurance company, just think how happy they will be to issue a policy to an American client living overseas.

    In short, I am forced to obtain citizenship in my country of residency, and give up my citizenship in the United States. It is either that, or say good-bye to my entire life work and return to the United States to starve at some bullshit minimum wage job (I own my own company outside the United States).

    Forget the Berlin Wall, what they are building in the United States is far, far more dangerous.

    • I am an American living and working overseas for over half my life. My ties to the U.S. are almost none-existent. My use of U.S. goods and services is possibly even less than many foreigners around the World. Occasionally I might buy a U.S. made product, but that is even rare given the poor quality.

      Here are the real effects, and this is just a short list I have time to type.

      1. Assumption that all Americans overseas are criminals by definition, even if we did not owe any taxes. The IRS, by their own calculations, says the basic forms will take over 72 hours a year for an American Expat to prepare to properly report their taxes. Most expat tax experts, can not figure them out.

      2. Foreign banks are closing or will refuse to open accounts for Americans. I know dozens of real cases already among friends. It is not just American citizens. It is anyone with a U.S. mail address, green card, or any payments transiting the United States to foreign banks. So, yes, many, many none Americans are caught up in this sweep of private information, the majority of which has nothing to do with tax money.

      3. The country I live in also has banking secrecy and privacy laws, and as a full resident, it even goes further because in the country where I live it is a constitutional right extended to both residents and foreigners.

      4. It also includes any company where an American might be a 10% owner or more, or might have signature authority over the company accounts or other assets. Just think what most international companies are going to do when making a choice between an American employee or CEO vs. a foreigner, as far as disclosing private company information to the U.S. government simply because they have an American working there.

      5. It includes disclosing foreign none-citizen none-resident private information to the U.S. government that are family members of an American citizen abroad. For example, a wife or kids account, investments, or pretty much anywhere the American might (you have to prove the negative) have authority over the money . Partnerships of all forms, of all sorts of complexity, are also subject to it. Imagine as a foreigner entering in to a contract with an American citizen, and having to report to the U.S. IRS your private information and dealings. Guess what most foreigners will do from now on to avoid such problems.

      6. This includes not only bank accounts, but investments, pensions, insurance policies, various types of contracts. I am not even sure how many insurance policies I have, let alone what would need to be reported. If you are a foreign insurance company, just think how happy they will be to issue a policy to an American client living overseas.

      In short, I am forced to obtain citizenship in my country of residency, and give up my citizenship in the United States. It is either that, or say good-bye to my entire life work and return to the United States to starve at some bullshit minimum wage job (I own my own company outside the United States).

      Forget the Berlin Wall, what they are building in the United States is far, far more dangerous.

      Spot on. Wish I had mod points for this.

    • This! Exactly! Wish I had mod points.

    • Re: (Score:2)

      by PRMan ( 959735 )
      C'mon, mods. Mod this guy up as Informative.

    • In short, I am forced to obtain citizenship in my country of residency, and give up my citizenship in the United States.

      Not so fast, Round-Eyes. Before you can renounce your US citizenship, you must sign an oath to that effect at an embassy or consulate outside the US, pay a fee of $450 and settle up with the IRS [renunciationguide.com] first! Only when the latter have agreed that you have nothing outstanding may you no longer call yourself an American. Otherwise, sorry, Bud -- you're still in!

  • Let the bears pay the bear tax. I pay the Homer tax!

  • Extraterritorial jurisdiction (Score:3)

    by dskoll ( 99328 ) on Tuesday February 04, 2014 @11:22AM (#46150541) Homepage

    This is affecting Canada [theglobeandmail.com] as well, and according to one article, this may affect Canadian citizens [cfib-fcei.ca] as well even if they have never been US residents or citizens.

    Could you imagine the uproar if (say) Iran threatened to trawl through US bank records for details on Iranian Americans? Totally disgusting. And yet the US can get away with it.

  • The critical issue here is that we don't know exactly what "US Person" means. Canada is in the throes of the same issue, with the US demanding access to banking records for any US Persons, and the scope of this is troubling.

    US Persons includes US citizens, of course. But it includes folks who might be entitled to citizenship through birth or parentage, whether or not they are actual citizens. It would include anyone who has ever resided in the US. And the definition can be manipulated to mean whatever t

  • Tax dodgers?
    Wealthy enough to emigrate to New Zealand?
    .
    .
    .
    I'm okay with this!

    • Are you implying that people living overseas are tax dodgers? How ignorant! They may be married to someone from that country, may have found work there, or may just like it more there than in the US. There are tons of reasons to be a resident of another country, which have nothing to do with dodging taxes.

      Besides: In many cases, the taxes in other countries are higher than in the US. No dodging there.

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