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Americans renouncing tax liabilities

Legacy Phuket Gazette

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PHUKET: The number of US taxpayers renouncing their citizenship or permanent-resident status reached a new high in Q2 of 2013. The figure of 1,130 people who the IRS listed as renouncing their status is two-thirds higher than the previous recent high, set in Q1 of 2013 and six times higher than Q2 of 2012. It is also the largest number since 1997.

There is a definite trend and while renunciation of citizenship requires no explanation, experts suggest that it is down to tougher tax laws and the manner of their enforcement by the American tax authorities – the IRS.

The US is the only nation in the 34-member OECD* which taxes its citizens no matter where they reside. With the implementation of the Foreign Account Tax Compliance Act (FATCA) on 1st July, 2014, Swiss and German banks in particular are turning away clients who are US citizens. In turn, many of the estimated six million Americans living overseas are weighing up the cost of keeping their US passport.

FATCA requires foreign financial institutions to report information to the IRS about financial accounts held by US taxpayers or held by non-US entities, in which US taxpayers hold a substantial ownership interest. The US Congress’s Joint Committee on Taxation has estimated that this regime will bring in USD 8.7 billion over ten years.

For those citizens suspected not to be disclosing enough information, the law requires banks to withhold 30% from certain US-connected payments. FATCA’s implementation date has recently been put back a second time, to give foreign banks time to comply.

Since 2011, Americans, who disclose their non-U.S. bank accounts to the IRS, have had to file the more expansive 8938 form that asks for all foreign financial assets, including insurance contracts, loans and shareholdings in non-U.S. companies. Failure to comply can result in a fine of up to USD 50,000. Clients can also be penalized half the amount in an undeclared foreign bank account under the Banks Secrecy Act of 1970.

Compliance with the requirements also has its price. According to tax lawyers, costs for companies to ensure their American workers are filing the correct US tax returns and asset-declaration forms are at least USD 5,000 per employee.

The extra reporting required also means that personal US accounting costs for each citizen residing abroad are estimated by tax lawyers to be USD 2,000.

It is no surprise then that so many US nationals are handing their passports in to their local embassy. However, this does not come without its costs, either. Former citizens are still required to prove that they have properly paid tax over the five previous years. Furthermore, anyone whose average US tax liability over the last five years was around USD 150,000 (the equivalent of roughly $500,000 in taxable income in 2012 dollars), and/or has a net worth of at least USD2 million on the date of expatriation, is liable to pay an exit tax. However, it appears that this net worth figure does not adjust with inflation.

All this seems contradictory to the Congressional Act of July 27, 1868 which declares “the right of expatriation is a natural and inherent right of all people, indispensable to the enjoyment of the rights of life, liberty, and the pursuit of happiness.” Still, the US government is doggedly pursuing its windfall.

* OECD members include 21 EU countries, Australia, Canada and Switzerland.

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MBMG Group is a multi-award-winning professional advisory practice that provides sound and impartial advice to assist private, corporate and institutional clients in protecting and building their hard-earned wealth. For further information, visit www.mbmg-group.com.

— MBMG Group

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Turbulence ahead for Thailand’s aviation industry | VIDEO

The Thaiger

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Turbulence ahead for Thailand’s aviation industry | VIDEO | The Thaiger

When the airlines, in particular, were asking the government to put their hands in their pockets for some relief funding in August last year, it was genuinely thought that international tourists would be coming back for the high season in December and January. At the very least local tourists and expats would head back to the skies over the traditional holiday break. And surely the Chinese would be back for Chinese New Year?

As we know now, none of that happened. A resurge in cases started just south of Bangkok on December 20 last year, just before Christmas, kicking off another round of restrictions, pretty much killing off any possibility of a high season ‘bump’ for the tourist industry. Airlines slashed flights from their schedule, and hotels, which had dusted off their reception desks for the surge of tourists, shut their doors again.

Domestically, the hotel business saw 6 million room nights in the government’s latest stimulus campaign fully redeemed. But the air ticket quota of 2 million seats still has over 1.3 million seats unused. Local tourists mostly skipped flights and opted for destinations within driving distance of their homes.

As for international tourism… well that still seems months or years away, even now.

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Domestic air passenger numbers double those of January

Maya Taylor

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Domestic air passenger numbers double those of January | The Thaiger
PHOTO: Vietjet

Passenger numbers on domestic flights within Thailand have doubled within a month, rising from 4,000 in January to over 10,000 this month. Having nearly recovered to pre-pandemic levels, domestic travel plummeted once more when Covid-19 resurfaced late last year.

Apirat Chaiwongnoi from the Department of Airports says 15 of Thailand’s 29 airports are now operating domestic flights, with more expected to follow. He believes the aviation sector will continue to recover further in the coming 6 months, bolstered by the national vaccine rollout.

Around 120 domestic flights a day are now operating, which is twice the number that were operating at the lowest point in the crisis. Prior to the resurgence of the virus in December, domestic passenger numbers had recovered to 30,000 – 40,000 a day, around 80% of pre-pandemic numbers.

The DoA says airports must continue to adhere to the Covid-19 hygiene measures put in place by the Health Ministry and the Civil Aviation Authority of Thailand.

SOURCE: Bangkok Post

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Coronavirus (Covid-19)

Samut Sakhon’s shrimp market to remain closed until February 15

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Samut Sakhon’s shrimp market to remain closed until February 15 | The Thaiger
PHOTO: Kom Chad Luek

Samut Sakhon’s Central Shrimp Market, the epicentre of Thailand’s recent wave of Covid-19, will remain closed until February 15. The market can reopen once the overall hygiene situation at the market and surrounding area has improved, according to the province’s disease control committee.

Local officials say the shrimp market needs to remain closed until the market structure and nearby residential facilities are inspected. People who violate the order face up to a year in prison and a fine up to 100,000 baht.

More than 12,000 people in the province have tested positive for Covid-19. The increasing number of infections is a result from the active case finding to contain the spread of the virus.

SOURCE: Thai PBS World | Thairath Online

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