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Trump tax reform bill threatens UK expat SMEs with bankruptcy
| Published: | 22 Mar at 6 PM |
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Trump’s brainchild tax reform, now known as the Apple tax, was brought in to force major offshore corporations to relocate their huge piles of cash back onshore but is now threatening American expat SMEs with bankruptcy.
Those at risk own 10 per cent or more of an offshore company or pay themselves via a company for tax purposes. American citizens living overseas, especially in Asia, often earn a sole living as consultants, and small family businesses are also in the firing line. Equally likely to be targeted are ‘accidental Americans’, who are forced to pay tax due to family connections or as visitors receiving university education.
Given the gross unfairness of the new law as well as its un-thought out consequences for expat SMEs. Washington has seen both sides of the political divide rallying support for at least a delay in its implementation or even the ultimate abolition of its links to overseas SMEs. American Citizens Abroad, Republicans Overseas, Democrats Abroad and other such groups have been lobbying any lawmaker who’ll stand still for long enough in an attempt to get justice for UK expats.
Earlier this month, 2,759 petitions urging a delay in the implementation of the law in addition to the major tax change to a territorial system for expats were delivered to lawmakers by Republicans Overseas. In the meantime, Republican lawmaker George Holding has almost completed potential legislation aimed at a move to a residence-based tax regime as well as as moves which would reduce or eliminate the burden of the Trump transition tax on US small business owners working overseas.
Approval for his attempt has come from all the major groups representing American expats, no matter what their political positions. All those against the unintended consequences of the Trump bill are certain the best way forward is to delay the bill’s implementation until territorial tax become the new policy. Lawmakers are saying there is a precedent for delay in that FATCA was put back numerous times before it finally took effect.
One reason for swift action, according to Republicans Overseas, is that those affected are expected to pay the first of eight tax instalments by a deadline of April 15, before which they’ll need to get together reams of paperwork, financial statements and proof of retained earnings going back 32 years! Another problem is that the US accounting standard is very different from that in use in the majority of world countries, possibly making compliance impossible.
Those at risk own 10 per cent or more of an offshore company or pay themselves via a company for tax purposes. American citizens living overseas, especially in Asia, often earn a sole living as consultants, and small family businesses are also in the firing line. Equally likely to be targeted are ‘accidental Americans’, who are forced to pay tax due to family connections or as visitors receiving university education.
Given the gross unfairness of the new law as well as its un-thought out consequences for expat SMEs. Washington has seen both sides of the political divide rallying support for at least a delay in its implementation or even the ultimate abolition of its links to overseas SMEs. American Citizens Abroad, Republicans Overseas, Democrats Abroad and other such groups have been lobbying any lawmaker who’ll stand still for long enough in an attempt to get justice for UK expats.
Earlier this month, 2,759 petitions urging a delay in the implementation of the law in addition to the major tax change to a territorial system for expats were delivered to lawmakers by Republicans Overseas. In the meantime, Republican lawmaker George Holding has almost completed potential legislation aimed at a move to a residence-based tax regime as well as as moves which would reduce or eliminate the burden of the Trump transition tax on US small business owners working overseas.
Approval for his attempt has come from all the major groups representing American expats, no matter what their political positions. All those against the unintended consequences of the Trump bill are certain the best way forward is to delay the bill’s implementation until territorial tax become the new policy. Lawmakers are saying there is a precedent for delay in that FATCA was put back numerous times before it finally took effect.
One reason for swift action, according to Republicans Overseas, is that those affected are expected to pay the first of eight tax instalments by a deadline of April 15, before which they’ll need to get together reams of paperwork, financial statements and proof of retained earnings going back 32 years! Another problem is that the US accounting standard is very different from that in use in the majority of world countries, possibly making compliance impossible.
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