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Report calls on French government to renegotiate tax deal for ‘Accidental Americans’

France should negotiate with the US in order to protect French-American dual citizens living here from the threat of US tax bills, a new report says.

Published: 16 May 2019 16:21 CEST
Report calls on French government to renegotiate tax deal for 'Accidental Americans'
Dual nationality can lead to a tax nightmare for Americans in France. Photo: AFP
The parliamentary report, released on Wednesday, states that France should renegotiate its FATCA tax treaty with the US and consider pulling out if it can’t find a way to protect those with dual French-American nationality. 
 
The Foreign Account Tax Compliance Act (FATCA) act, signed in 2010, was created to stop tax evasion by Americans with financial assets abroad after a financial scandal revealed that US taxpayers were hiding millions of dollars overseas. 
 
But since it was rolled out in France in 2013, dual French-American citizens living here are being slapped with huge tax bills from a country they are unfamiliar with that they can little afford to pay.  
 
The term for people who fall into this category is 'Accidental Americans' and they are those who have US citizenship but do not live there, with many of them having little or no connection to the country at all. 
 
READ ALSO:

How to renounce American citizenship in France - and why you might want to Photo: AFP

One of the reasons behind the problem is that US tax eligibility is based on citizenship and not residency (as it is in most countries).

The report, written by an MP from French President Emmanuel Macron’s La Republique En Marche party in partnership with an MP from the centre-right, calls for restrictions on the way FATCA is implemented in France.
 
It asks the government to limit it to those who earn above a certain income as well as to better align the French and US taxation systems to avoid people being forced into a double taxation situation.
 
“In the case of failure of these negotiations, we should envisage unilaterally pulling out of FATCA and restricting the transfer of information,” the report said, adding that regulators in the banking sector should remind banks that they are not allowed to discriminate against clients for having links to the US.
 
The news is a positive step forward for those who, in some cases were not even aware they were American until being informed by their banks, and have spent years campaigning for action to be taken. 
 
“This report asks the Government to enter into negotiations with the United States with a view to finding a solution to the problems faced by Americans,” President of the 'Association des Americains Accidentels' (Association of Accidental Americans), a campaign group devoted to defending the rights of those affected in France, Fabien Lehagre told The Local.   
 
“And if there is no willingness on the part of the United States to find a solution, France could consider unilaterally denouncing the intergovernmental agreement.
 
“This should prompt other governments to act to defend their citizens against the perverse effects of US extraterritorial law.”
 
According to the European Banking Federation (EBF), more than 300,000 people in the European Union are 'Accidental Americans'.
 
 

Member comments

  1. US reaching out and strong arming US citizens living outside the Empire. Totally unfair but it won’t stop until a major country stands up to this tyranny. If I could get rid of my US citizenship I would do it, but in my case impossible. Good luck I hope someone can convince Macron to do something.

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Beskæftigelsesfradraget: What is Denmark’s employment allowance?

Denmark's government may soon announce changes to its tax reform plans, which will give all wage earners a bigger employment allowance. What is this and how will it affect foreigners' earnings?

Published: 30 October 2023 15:21 CET
Beskæftigelsesfradraget: What is Denmark's employment allowance?

What is the employment allowance? 

The Beskæftigelsesfradraget (from beskæftigelse, meaning employment, and fradrag, meaning rebate) was brought in by the centre-right Liberal Party back in 2004, the idea being that it would incentivise people to get off welfare and into a job.

Everyone whose employer pays Denmark’s 8 percent AM-bidrag, or arbejdsmarkedsbidrag, automatically receives beskæftigelsesfradraget. Unlike with some of Denmark’s tax rebates, there is no need to apply. The Danish Tax Agency simply exempts the first portion of your earnings from income taxes. 

In 2022, beskæftigelsesfradraget was set at 10.65 percent of income with a maximum rebate of 44,800 kroner. 

How did the government agree to change the employment allowance in its coalition deal? 

In Responsibility for Denmark, the coalition agreement between the Social Democrats, the Liberals and the Moderate Party, the new government said it would set aside 5 billion kroner for tax reforms.

Of this, 4 billion kroner was earmarked for increasing the employment allowance, with a further 0.3 billion going towards increasing an additional employment allowance for single parents.

According to the public broadcaster DR, the expectation was that this would increase the standard employment  allowance to 12.75 percent up to a maximum rebate of 53,600 kroner. 

How might this be further increased, according to Børsen? 

According to a report in the Børsen newspaper, the government now plans to set aside a further 1.75 billion kroner for tax reforms, of which nearly half — about 800 million kroner — will go towards a further increase to the employment allowance. 

The Danish Chamber of Commerce earlier this month released an analysis in which it argued that by raising removing all limits on the rebate for single parents and raising the maximum rebate for everone else by 20,300 kroner, the government could increase the labour supply by 4,850 people, more than double the 1,500 envisaged in the government agreement. 

According to the Børsen, the government estimates that its new extended allowance will increase the labour supply by 5,150 people.  

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