MEPs want to open negotiations on an EU-US FATCA agreement
A resolution on the adverse effects of the US Foreign Tax Compliance Act (FATCA) on EU citizens and “accidental Americans” was endorsed by plenary on Thursday.
The resolution states that the US federal law FATCA, which requires EU financial institutions to report detailed information on identities and assets held by presumed “US persons” to US authorities, might lead to the arbitrary exposure and punishment of both EU-US dual citizens and “accidental Americans”.
The term “accidental Americans” refers to individuals who by accident of birth inherited US citizenship, but who maintain no ties to the country, having never lived, worked or studied there and who do not hold US social security numbers.
MEPs say that the information that EU financial institutions require, under the threat of franchise-destroying penalties in the US, could constitute a breach of EU data protection rules and fundamental rights (B). The FATCA law was originally introduced to stop US citizens evading taxes, since they could be subject to tax filing obligations, even if they have never resided in the America.
- calls on the Commission and EU governments to present a joint EU approach to FATCA in order to adequately protect the rights of European citizens and “accidental American’s”,
- calls on EU governments to mandate the European Commission to open negotiations with the US on an EU-US FATCA agreement, which should cover the possibility for EU “accidental Americans” to relinquish their unwanted US citizenship on a no-fees, no-filings, no-penalties basis,
- calls on EU countries to ensure the full and correct transposition of the EU Payment Accounts Directive, and to guarantee the right for all EU citizens to have access to a payment account with basic features irrespective of their nationality,
stresses the importance of providing an adequate level of protection of personal data transferred to the US under FATCA, in full compliance with national and EU data protection law, and
- calls on the European Commission to conduct a full impact assessment of FATCA and the US extraterritorial practice of citizen-based taxation (CBT) on EU citizens and EU financial institutions.
The text, tabled by the European Parliament’s Petitions Committee, was approved by 470 votes to 43, with 26 abstentions.
The Chair of the European Parliament’s Petitions Committee, Cecilia Wikström (ALDE, SE), said: “The affected citizens have for too long been neglected by the member states and EU institutions to please the US government. It is therefore high time for the European Commission and the European Council to recognise the problems and start addressing them. As chair of the Petitions Committee, I therefore urge the Commission and the Council to present a joint EU approach to FATCA, and to open negotiations with the US on an EU-US FATCA agreement, ensuring the full reciprocal exchange of information and compliance with relevant EU laws.”
The US and Eritrea are the only two countries in the world that have adopted citizen-based taxation, and Eritrea has been condemned by the United Nations for its efforts to enforce its “diaspora tax”.
The petition resulting in the tabling of this resolution was submitted on behalf of a collective of EU citizens from Germany, France, the United Kingdom, Italy, the Netherlands, Spain, Ireland, Sweden and Belgium.