The Philippine Department of Finance announced July 13 that a deal has been reached with the United States on implementing FATCA in the Philippines.
Displaying perhaps the most enthusiastic reception of the IRS’s extraterritorial tax-compliance legislation by any compliant country to date, the Philippine government’s press release stated, “FATCA is rapidly becoming the global standard in the effort to curtail offshore tax evasion.”
In the release, government representatives both championed their inevitable signatures to the agreement as a defeat against tax evasion. Finance Secretary Cesar V. Purisima noted that fiscal transparency is one of four points the Philippines will advance at upcoming Asia-Pacific Economic Cooperation finance ministers’ meetings.
U.S. Ambassador Philip S. Goldberg emphasized that the deal was beneficial to both countries and even the entire world, a common refrain from U.S. ambassadors when securing implementation agreements from foreign governments.
In May, IRS National Taxpayer Advocate Nina Olson’s suggested merging the overlapping reporting requirements on multiple forms into one form and changing rules for identifying and reporting accounts for Americans abroad when they are resident in the country where their account is held. Goldberg did not comment on that suggestion.
In early July, Carolyn Maloney and Mick Mulvaney, co-chairs for the congressional caucus for Americans living abroad, voiced for support for a similar suggestion, on behalf of the approximately 8 million U.S. citizens living abroad. That government release spoke less of tax evasion and more of ordinary U.S. citizens unable to open personal bank accounts overseas because of banks not taking U.S. clients due to the onerous FATCA reporting requirements.
Under FATCA, banks must comply with IRS rules, reporting information on American clients with accounts worth more than US$50,000 or signing a statement to the IRS that states they have no U.S. clients. Noncompliant banks see a 30% withholding on their U.S.-dollar wires.