It’s the day American expatriates all over the world have been dreading. A new law forcing them to disclose their overseas assets goes into effect.
Known as FATCA, it forces foreign financial institutions to disclose any U.S. citizens’ accounts worth more than $50,000.
If they don’t, account holders are liable to a 30 per cent tax on cross-border payments.
It was inspired by a raft of cases of Americans hiding vast amounts in offshore tax havens.
The law has triggered a wave of Americans renouncing their citizenship, nearly 3,000 last year according to U.S. Treasury data.
Around 80 countries have signed up to the FATCA law. China was one of the last.In fact, it signed up just a few days before the legislation took effect.
It will apply to around 72 thousand Americans living in China and more than 60 thousand living in Hong Kong.
As with other countries, China will be able to use FATCA to ensure its citizens in the US disclose their finances.
CCTV’s Zou Yun spoke to Daniel Mitchell, senior fellow at think tank the CATO Institute, about what kind of international impact the FATCA law would have.