Lieber Luzi,

Kurzantwort: noch nicht, d.h. eine autoritative Antwort ist mir seitens des
GAO-Bericht-Redaktors versprochen worden.

Dein dannzumal an die SBVg eingereichter Protest-Brief zur QI-Problematik ist mehr denn je lesenswert - und verdient m.E. auch dringender denn je eine substantielle Antwort seitens der betroffenen Banken und ihres Berufsverbandes. Denn was nun abläuft und als weiteren Tsunami auf uns zukommt lässt sich allein schon aus den neuesten NZZ-Titel vom 18.März 2000 ableiten: "Weltweites Entsetzen über US-Steuergesetz - Finanzplatz Schweiz rechnet mit einschneidenden Folgen", "USA knöpfen sich globale Banken vor -
Gravierende Folgen für Schweizer Finanzplatz befürchtet", "Deutsche Banken fürchten enormen Mehraufwand", und (17.3.) "Die USA packen die Peitsche aus - Ausländische Finanzhäuser sollen US-Kontoinhaber der Steuerbehörde melden". Womit m.E. dringend Handlungsbedarf angezeigt ist - nicht zuletzt auch auf Stufe Parlament (z.B. in Form einer unverzüglichen generellen Rücknahme der von Bundesrat Villiger damals den Banken auf dem Hintertreppenweg zugestandenen Suspendierung von Art.271 StGB)..


Luzi Stamm wrote:

  Lieber Anton

  Ich bin im Moment überfordert, viel zu lesen. Haben wir eine Antwort, ob 28 % vom Kapital abgeliefert werden / wurden oder nicht? Was hat das mit dem damals von mir eingegebenen Brief zu tun?

  Beste Grüsse


  Von: []

  Gesendet: Samstag, 20. März 2010 16:25
  An: Luzi Stamm
  Betreff: QI & FATCA matters (Foreign Account Tax Compliance Act, hidden in Jobs Bill)

  Lieber Luzi,
  hier ein update zu Deinem weiterhin unbeantwortetenQI-Brief an die SBVg vom 13.Dez.2000, sowie zur scheinbar weiterhin missachteten QI-Kernfrage: IRS's 28% backup withholding tax on interest or on capital only?

Hi Bruce,

    Tks for the very useful, timely and thus the more helpful inputs and updates. I've alerted my local banker friends already in early November on the upcoming FATCA problematic. Moreover, I've repeatedly suggested to them conceivable practical counter measures for securing the affected legitimate interests of the US, Switzerland and other countries and their citizens and clients ( Unfortunately, I've yet to see a simple acknowledgement. And I'm still waiting for some to follow up on past effective consultations and promises for serious face-to-face meetings.  Thus, for the time being, I cannot offer you a renewal of what remains indicated under the circumstances, i.e. a properly paid mandate to do effective footwork and research in and near Washington's legislative and executive power centers.

    I've called both the FATCA contact person at Baucus' office, Mary Eddy (202-2244515), and Michael Brostek (202-5129110), the GAO contact person for its Report GAO-08-99 "Tax Compliance - Qualified Intermediary Program ..." of December 2007. I've also studied the Joint Committee on Taxation's QI-related Reports JCX-65-08 "SELECTED ISSUES RELATING TO TAX COMPLIANCE WITH RESPECT TO OFFSHORE ACCOUNTS AND ENTITIES" of July 23, 2008, and JCX-4-10 "TECHNICAL EXPLANATION OF THE REVENUE PROVISIONS CONTAINED IN SENATE AMENDMENT 3310, THE 'HIRING INCENTIVES TO RESTORE EMPLOYMENT ACT'” of February 23, 2010

    On the basis of my own ten-year old involvement with QI matters - as reflected in my noted subsites and .../USvsUBS.htm - I was surprised to find in neither of the above congressional watchdog reports any adequate discussion or quantitative assessment of the arrogant, for extra-constitutional creation and world-wide enforcemnt of the IRS' 28% "backup withholding" tax. Revealingly, the above GAO report, on page 10, only mentions: "If there is insufficient documentation to adequately determine the treaty status of an account owner, the QI, a nonqualified intermediary, or a U.S. financial institution must use the presumption rules11 and apply backup withholding. Backup withholding is regulated separately, reported separately, and processed separately from routine NRA income and withholding." (emphasis added). Not surprisingly then, the report offers no figures on what the IRS globally has collected through its some 7000 QI banks under the heading "backup withholding.". Moreover, in table 3 on page 24, it details "Foreign Corporate U.S. Source Income, Withholding, and Benefits, Tax Year 2003", but specifies only three "Types of Income", i.e. Interest, Dividends and Miscellaneous, totallig $2.8 bn, with the latter thus defined: "Miscellaneous income includes royalties, pensions, compensation for personal services, REIT  distributions, notional principal contracts, and other income."

    This gave rise to my query to the author of the GAO report, Mr. M.Brostek, as to whether, in his view, said 28% backup withholding tax was thus included or, alternatively, related exclusively to capital, as the original IRS's definitions would seem to suggest (see original IRS QI Model Areement,Rev. Proc 2000-12, sec. 2.44 & 3.04, reproduced in "QI-related legislative & executive elements": .../QIdetails.htm#reportablepayment & .../QIdetails.htm#responsibility)  At present, related questions - including the amount globally collected by the IRS under the heading "backup withholding" - is understood to be under examination by authoritative sources, and I expect reliable answers to be forthcoming within the next 30 days.

    Finally, I also had a chat with a long-time acquaintance of mine, the edpage editor of Barrons, Tom Donlan (202-8626606) who, on December 4, 2000, published the first QI-critical editorial by an American newspaper Pyrrhic Victory: IRS turns foreign banks into its tax agents. I understand this to have been motivated primarily out of concern for the US economy which risked significant ill-considered backlashes of the QI system from foreign investors, and which is now again at risk by the FATCA - as illustrated by the Swiss Wegelin bank's clarion call for a general withdrawal from the US market (Konrad Hummler, Farewell America, Wegelin newsletter # 265). Assuming this to be agreeable to you, I also gave Tom your coordinates (202-2932371) in case he needs a knowledgable non-governmental source on tax, QI and FATCA matters.

With best wishes and regards,

Anton Keller, Secretary, Swiss Investors Protection Association
+4122-7400362    +4179-6047707

Bruce Zagaris wrote:

Hi Anton:

The following legislative development today may be of interest:

President Obama Signs New Tax Law Requiring Information Reporting with Respect to Foreign Financial Institutions and Foreign Bank Accounts

On March 19, 2010, President Obama signed into law the Hiring Incentives to Restore Employment (HIRE) Act. This new legislation has several provisions that were introduced as part of the Foreign Account Tax Compliance Act (FATCA). They increase information reporting and enforcement measures with regard to offshore accounts and foreign entities, especially foreign financial institutions.

Of particular interest to foreign financial institutions and entities are are provisions related to foreign accounts and entities. For instance, the provisions require (a) increased withholding obligations on payments to foreign banks, trusts and corporations which do not supply certain information to the Internal Revenue Service, such as the names of United States citizens and residents who directly or indirectly own foreign financial accounts, (b) increased reporting obligations including an annual obligation to report any direct or indirect interests in certain foreign entities engaged in passive investments or offshore mutual funds, (c) increased penalties for failure to file certain informational returns, and (d) an increase in the statute of limitations for assessment by the Internal Revenue Service if there is a “substantial” omission of income from offshore assets.

best regards,

Bruce Zagaris
Berliner Corcoran & Rowe L.L.P.
1101 Seventeenth St., N.W.
Washington, D.C. 20036
(202)293-2371 (ph.)
(202)293-9035 (fax)

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