Avocado Roundup is a quick review of top tax, legal, and climate news stories. It’s written by humans.
- A Brussels appeals court Wednesday threw out an order by the Belgian data protection authority that barred the federal tax authority from sending Belgian Americans’ banking data to the US Internal Revenue Service. The data watchdog in May found that sending the data to the IRS, though required by Belgium’s intergovernmental agreement with the US under the US Foreign Account Tax Compliance Act of 2010 (FATCA), violates European data protection law.
- In its 53-page decision, the appeals court remanded the case to the data protection authority, whose litigation body must reconvene, with different members, to reconsider findings by the watchdog’s own inspectorate that transferring Belgian citizens’ personal data to the US does not violate EU law.
- The appeals court will likely see the case again. “This judgment, without ruling on the merits, seems to indicate a shifting the hot potato back to the DPA, perhaps in a spirit of buying time,” said Fabien Lehagre, president of Paris-based Association des Américains Accidentels, in a press release. (LinkedIn)
- A Belgian affiliate of Américains Accidentels filed the data protection challenge to the country’s data transfers to the IRS. That led to the federal DPA’s ruling in May, and the tax authority’s appeal. (Brussels Times) (Belgian Federal DPA’s decision)
- FATCA 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. (Daily Tax Report)
- 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 so-called 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. (LegalAvocado.com)
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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.
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Lehagre said his association has several other legal challenges to FATCA on data privacy and other grounds at EU and national level.
OECD tax-policy body elects UK corporate tax official as new chair
- UK tax official Tim Power was elected to lead the powerful committee on fiscal affairs of the Organization for Economic Cooperation and Development. Power is deputy director for business and international tax in His Majesty’s Treasury of the United Kingdom, where he and his team are mainly in charge of corporate tax matters. (OECD.org)
- The CFA is the OECD’s main body for work on taxation, covering both international and domestic tax issues and tax policy and administration. As CFA chair, Power will also be co-chair of the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting, whose 140-plus members include the OECD’s 38 members, which are mostly wealthy countries, as well as developing and emerging countries and jurisdictions. The Inclusive Framework among other things has approved the OECD’s two-pillar reform of the global tax framework. Its other co-chair is Marlene Nembhard-Parker of Jamaica, who took her role in March 2022.
