Austria Said to Be Renegotiating FATCA Accord with US

The Austrian government is renegotiating the agreement that governs its tax information exchange arrangement with the United States under FATCA, according to a French organization representing so-called accidental Americans.

The US Foreign Account Tax Compliance Act of 2010 requires foreign financial institutions to report information about their American account holders to the US Internal Revenue Service, or face a 30% penalty on their US assets if they fail to comply.

The law, aimed at fighting tax evasion, has caused some US expatriates  to lose their bank accounts and prevented them from getting access to other financial services, such as retirement savings. It has also complicated the lives of accidental Americans, people treated as Americans under FATCA because they were born in the US or to American parents, even though they’ve never lived in the US.

EU member states signed separate intergovernmental agreements with the US, setting out terms of how financial institutions in their countries are required to send information to the IRS.

Austria’s IGA among other things calls for “direct reporting” by Austrian financial institutions to the IRS, supplemented by the exchange of information upon request” under the US-Austria bilateral tax treaty.

The France-based Association of Accidental Americans has filed several legal challenges to FATCA on data privacy and other grounds at EU and national level.

Fabien Lehagre, the association’s founder and president, on Saturday on LinkedIn and X, reported an Aug. 10 communication he received from the French data privacy watchdog, the CNIL, responding to his request for information about the European Commission’s activities regarding a recent FATCA complaint in Belgium.

The CNIL communication included a June 7 European Commission memo with, among other things, information that the Austrian government is renegotiating its FATCA agreement with the US.

The CNIL provided no further details about Austria’s negotiations with the IRS. Lehagre speculated they could be aimed at amending the Austrian IGA to require Austrian financial institutions to report US account holder information to the Austrian tax authority, not directly to the IRS.

 “This renegotiation opens up possibilities,” said Lehagre, it’s “a step that could resolve the difficulties faced by accidental Americans” because of FATCA.

 Stay tuned.

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