{"id":82337,"date":"2024-03-04T17:25:35","date_gmt":"2024-03-04T17:25:35","guid":{"rendered":"https:\/\/adamfayed.com\/?p=82337"},"modified":"2024-03-06T09:48:30","modified_gmt":"2024-03-06T09:48:30","slug":"what-belgiums-ban-on-fatca-transfers-to-the-us-means-for-offshore-accounts","status":"publish","type":"post","link":"https:\/\/adamfayed.com\/it\/expats\/expat-guide\/what-belgiums-ban-on-fatca-transfers-to-the-us-means-for-offshore-accounts\/","title":{"rendered":"What Belgium\u2019s Ban on FATCA Transfers to the US Means for Offshore Accounts"},"content":{"rendered":"

Belgium’s data protection authority (DPA) has deemed the transfer of financial account data of “accidental Americans” to the US government, mandated by FATCA<\/a>, as illegal under EU law.<\/p>\n\n\n\n

Questo decision<\/a> follows complaints under the General Data Protection Regulation (GDPR), arguing that the Foreign Account Tax Compliance Act reports exposed compliant bank account holders to disproportionate data protection and security risks.<\/p>\n\n\n\n

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FATCA, officially in effect since 2014, requires non-US banks to report American clients’ bank accounts annually.<\/p>\n\n\n\n

Espatriati americani<\/a> in Europe contested this under GDPR, leading to complaints filed with the Belgian DPA, making Belgium the first EU member state to permit such challenges.<\/p>\n\n\n\n

The DPA stated that the data processing, per the Belgian agreement, doesn’t align with GDPR<\/a> principles.<\/p>\n\n\n\n

It instructed the Belgian Federal Public Service Finance (FPS Finance)<\/a> to cease transfers and notify the legislator of legal deficiencies.<\/p>\n\n\n\n

Vincent Wellens, representing the complainants, noted the disproportionality of collecting data of US nationals vivere all'estero<\/a>, many of whom don’t owe taxes in the US.<\/p>\n\n\n\n

FPS Finance defended its practice, citing a ‘standstill’ exception in the GDPR, but the DPA<\/a> ruled it insufficient for the generalized processing of FATCA reports.<\/p>\n\n\n\n

Hielke Hijmans, the chairman of the authority’s Litigation Chamber, emphasized the obligation to stop data flows not complying with the law, aligning with European Court of Justice rulings.<\/p>\n\n\n\n

Filippo Noseda of Mishcon de Reya<\/a> highlighted that the decision holds governments to GDPR obligations, urging other EU Member States to follow Belgium’s lead.<\/p>\n\n\n\n

This article is not formal tax advice.<\/p>\n\n\n\n

\"What<\/figure>\n\n\n\n

FATCA<\/h2>\n\n\n\n

What is FATCA?<\/h3>\n\n\n\n

Enacted in 2010<\/a> as part of the Hiring Incentives to Restore Employment (HIRE) Act, the Foreign Account Tax Compliance Act was signed into law by former President Barack Obama.<\/p>\n\n\n\n

It aims to combat tax evasion by American individuals and businesses with foreign financial assets, requiring disclosure and reporting to the Internal Revenue Service (IRS).<\/p>\n\n\n\n

FATCA Reporting<\/h3>\n\n\n\n

Involves the annual submission of Form 8938 by U.S. taxpayers with financial assets exceeding $50,000, encompassing bank accounts, stocks, bonds, and other instruments.<\/p>\n\n\n\n

FATCA Exemption<\/h3>\n\n\n\n

Certain exemptions exist, such as assets held in a foreign branch of a U.S. institution or a U.S. branch of a foreign institution.<\/p>\n\n\n\n

\"FATCA<\/figure>\n\n\n\n

FATCA Form<\/h3>\n\n\n\n

Refers to Form 8938, a mandatory filing for American taxpayers, including those living abroad and meeting specified foreign financial asset thresholds.<\/p>\n\n\n\n

FATCA Compliance<\/h3>\n\n\n\n

This means adherence to the reporting and disclosure requirements outlined by FATCA to ensure compliance with the law.<\/p>\n\n\n\n

FATCA Withholding Tax<\/h3>\n\n\n\n

Failure to comply with FATCA reporting may result in a 30% tax penalty on withholdable payments, impacting foreign financial institutions.<\/p>\n\n\n\n

Impact on Offshore Accounts<\/h2>\n\n\n\n

Belgium’s data protection authority’s ruling on FATCA’s financial data transfer raises data protection concerns for US conto offshore<\/a> holders.<\/p>\n\n\n\n

If implemented in other EU countries, it could prompt a broader reassessment of the Act’s compliance with EU data protection regulations.<\/p>\n\n\n\n

\"Offshore<\/figure>\n\n\n\n

Key considerations of this ban include:<\/p>\n\n\n\n