A banking industry association in the Netherlands said on Friday that it was working with the American Embassy in the country to resolve the issue of American account-holders who lack "Tax Information Numbers," or U.S. Social Security numbers, but who are reluctant to get one ahead of imminently giving up their American citizenship.
In a statement today, the Nederlandse Vereniging van Banken (NVB) said it was working with the U.S. embassy officials on developing "some sort of certificate that can prove that [an American bank account holder had] started the loss of nationality procedure", which it is thought could thus enable the American's Dutch bank to be considered FATCA-compliant, even though the American account holder didn't have a Social Security Number (SSN).
"With such a certificate, the problem of not having a TIN or SSN will be solved, and banks will not have to close accounts," the NVB statement said.
"We will update the information on our website next week."
As reported, in a pro-active response to a looming end-of-the year U.S. "Tax Information Number" deadline banks across Europe are struggling to deal with, the the NVB recently posted a 90-second animated video on the home page of its website, in which it had warned Social Security-lacking American holders of Dutch bank accounts of the need to get one, if they didn't wish to lose these accounts at the end of the year.
The NVB posted the video in response to a growing concern among banks across Europe about the ending, on Dec. 31, of a grace period during which non-U.S. financial institutions have been allowed not to include the "Tax Information Numbers" (TINs) of American bank account holders who don't have them, when the banks file their annual FATCA forms to the U.S. authorities on behalf of these American clients, as FATCA (Foreign Account Tax Compliance Act) obliges them to do.
On Friday, the U.S. Internal Revenue Service unveiled a new fast-track scheme for "certain" expatriate Americans looking to renounce that, the IRS said, would not need to get a Social Security Number ahead of renouncing, assuming that they qualified for the program.
The announcement appeared to change the advice banks and other financial institutions had been told to give their American account-holders who lacked SSNs – thus evidently prompting the NVB to engage in talks with the American Embassy in Amsterdam.
FATCA is an Obama-era tax evasion law that provides for a significant (30%) withholding tax on certain U.S.-source payments to any "foreign financial institutions" that don't agree to FATCA's requirement that they file an annual report to the U.S. on the financial accounts of all their American clients. Although many financial institutions around the world have dealt with this issue by simply refusing to have Americans as clients, Europe's banks are obliged to comply with an EU-wide law that requires them to provide bank accounts to all EU citizens who request them.
An unknown and still-growing number of these account holders are turning out to be "accidental Americans," who were typically born in the U.S. to European parents and didn't realize, until their European bank informed them, that the U.S. regarded them as a U.S. citizen and thus obliged to file a U.S. tax return each year, and potentially pay taxes to the U.S.
- Lawsuit in UK to challenge legality of British gov't's data-sharing under FATCA
- Questions raised over 'need' for some 'accidentals' to get SS numbers after new IRS 'Relief Procedures' for renouncing
- American Citizens Abroad responds to IRS 'procedures' with re-issue of call for Same Country (FATCA) Exemption
- Opinion: What frozen bank accounts of U.S. citizens in Europe could mean for U.S. citizens elsewhere
- Report: Dutch lawmakers say 'accidental American tax chaos best dealt with by Europe'