- Home » Expat News » US expats get more time to comply with hated transition tax
US Expats Get More Time To Comply With Hated Transition Tax
Published: | 5 Apr at 6 PM |
Want to get involved?
Become a
Featured Expatand take our interview.
Become a
Local Expertand contribute articles.
Get in
touchtoday!
In a move designed to help US expats overseas comply with the onerous Trump transition tax requirements, the US Treasury has put the deadline back by two months.
The news is being welcomed by US expat business owners across the world, but protest groups are still criticising the flawed nature of the tax as it applies to expats with stakes in businesses overseas. The campaign to eliminate the potentially damaging new law is to continue, and is being supported by cross-political American expat organisations. Following yesterday’s announcement, the first transition tax payment will be due on June 15, with campaign group American Citizens Abroad stating their approval but making it clear their battle for its abolition for individual expats with stakes in small business ownership isn't over.
The original bill was introduced as a measure to prevent large multinationals including Google and Apple from retaining profits made offshore in order to avoid paying US taxes. The law as it now stands forces US expats with as little as 10 percent interest in overseas businesses to pay a one-off tax on unrepatriated overseas earnings, set at 15.5 per cent cash and eight per cent on other assets, According to data from Republicans Overseas, the measure is threatening overseas businesses owners with bankruptcy, with the original deadline of March 15 impossible to comply with due to the amount of documentation required.
The law as written must still apply when no actual distribution of profits has been made, as it’s considered a ‘deemed or constructive’ distribution to the individual concerned. In this instance, US expats are to be taxed on money they never received. Lawyer for American Citizens Abroad Charles Bruce calls the application of the law to overseas SME owners ‘frankly ridiculous’, as they need to complete and file an identical form after making identical calculations as must multinational companies. Requirements include financial statements and details of retained earnings for the past 32 years in a format compliant with US tax accounting norms which are different from any other world tax reporting system.
Both Republicans overseas and Democrats Abroad as well as American Citizens Abroad are pushing lawmakers to reject the tax as it applies to US expats as well as calling for the overhaul of the ‘double taxation’ system applied to Americans overseas. Their aim is territorial taxation, meaning if tax is paid in expats’ countries of residence, it cannot be demanded by the IRS.
Comments » No published comments just yet for this article...
Feel free to have your say on this item. Go on... be the first!
RECENT NEWS
Santorini Earthquakes: What Does It Mean For Holidaymakers Visiting The Popular Greek Island?
Santorini earthquakes: What does it mean for holidaymakers visiting the popular Greek island? Read more
You Learn To Live With Much Less: Why This Family Decided To Set Sail And See The World
‘You learn to live with much less’: Why this family decided to set sail and see the world Read more
Where Is The White Lotus Season 3 Set? Step Into Thailands Must-see Filming Locations
Where is The White Lotus season 3 set? Step into Thailand’s must-see filming locations Read more
Gastronomic Greats: Europe's Top Tourist Cities For Michelin-starred Dining
Gastronomic greats: Europe's top tourist cities for Michelin-starred dining Read more
Bouncers Hired To Control Crowds In Japanese City After Tourist Is Killed While Taking A Photo
Bouncers hired to control crowds in Japanese city after tourist is killed while taking a photo Read more
Dubai Is The World's Busiest Airport, But Is The Tourism Boom Begining To Strain The Affluent City?
Dubai is the world's busiest airport, but is the tourism boom begining to strain the affluent city? Read more