A man fumbles about in a Florida airport, trying to look inconspicuous, before security flags him and discovers he is a private banker for UBS that is smuggling diamonds in his toothpaste tube for a rich client. The ploy was part of a scheme by the global bank with Swiss ties to help wealthy American clients evade taxes, but the consequence is a law that threatens to affect every foreign institution that deals with an American client or expat.
‘‘Most banks in Thailand will comply with Fatca, but that doesn’t mean they won’t throw their American clients out,’’ says Mr Blaine, while Mrs Creveling suggests there will always be banks available to service American clients in Thailand. KOSOL NAKACHOL
The smuggler subsequently became a whistleblower against UBS, helping to end centuries of Swiss bank secrecy in the process after negotiations with the US government, but a US law passed in 2010 promises to have a much larger impact. The Foreign Account Tax Compliance Act (Fatca) requires US taxpayers holding foreign financial assets with an aggregate value exceeding US$50,000 to report the information on their annual tax return. But it also requires foreign financial institutions to report certain information to the US Internal Revenue Service (IRS) about financial accounts held by US taxpayers or by foreign entities in which US taxpayers hold a substantial ownership interest.
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