USA

Protest Grow Over Tax Demands For Accidental Americans

Thousands of people around the world are facing unexpected tax bills because they are Accidental Americans.

Accidental Americans are those considered as US citizens by birth even if they have never set foot in the country.

Many are children of American expats captured in the US tax net by the Internal Revenue Service.

They are coming to the attention of the US tax authority because of data exchanges between Washington and more than 100 countries and 300,000 financial institutions worldwide who provide their information under the controversial Foreign Account Tax Compliance Act (FATCA).

Banks and tax authorities must tell the IRS about any US citizen who controls a bank account or investments outside the US.

Unaware of tax bills

Many were unaware that they might owe tax in the US.

The IRS wants them to pay a share of their earnings because US citizens are taxed on their worldwide earnings regardless of where they live.

British Foreign Secretary Boris Johnson faced a capital gains tax bill when he sold a home in London that was not liable to tax in the UK. Johnson was born in New York but has lived most of his life in Britain.

Around 10,000 people with US connections in France have formed a protest group against FATCA.

Now, the focus has shifted to the Republic of Ireland, where several thousand people have US connections.

“We do not know the full extent of what taxes the IRS might be imposing on Irish citizens who also have US citizenship,” Irish European MP Brian Hayes said.

Anomaly in US tax law

“I am calling on the Irish government to get ahead of the curve on this issue before many people find out they have huge US tax bills.

“Cohorts of people should not be hit with extra bills due to some anomaly in US tax law.”

Some Accidental Americans are trying to avoid tax issues with the IRS by renouncing their US citizenship – but that requires them to pay an ‘exit tax’ of at least $2,000 and to settle any outstanding tax bills.

Data transfers to the IRS started in September 2016.

The IRS says more than $10 billion of ‘lost’ tax has been recovered under FATCA, which was designed to track US taxpayers hiding cash and assets in foreign countries.

An unintended consequence seems to be that the law is also trapping non-Americans who live abroad.

Markets Wait On Fed For Interest Rate Rise

All eyes are on the US Federal Reserve as interest rates were left at a record low of 0.25% by the Bank of England in the face of better than expected economic data.

Markets are waiting with bated breath for the Fed to hike interest rates – which chair Janet Yellen has hinted will happen for some time.

But the will-she-won’t-she jitters have seen stock markets around the world fall in recent days.

The Fed rate fixing committee meets on September 21.

The meeting is the favourite date for financial experts as traditionally, the Fed does not tinker with interest rates around a Presidential election, which is due in November.

Last year, the rate was ratcheted up in December, but with the new president due to be sworn in January, many believe the Fed will act now or hold on until the New Year.

UK pegs rates again

In the UK, encouraging data from retailers and unemployment and a small boost in inflation led to the Bank of England’s monetary policy committee pegging the official interest rate.

The committee voted unanimously for no rate change and to keep the economic stimulus program on the table.

In a statement, the committee said that the British economy is unlikely to see much growth for the rest of the year.

The increase in the cost of living was 0.6% year on year to August.

The FTSE100 responded well, increasing by 0.17% to 6,685 points immediately after the announcement at midday.

The next result is an important figure as the figure is one of the three triggers for the State pension triple lock guarantee.

Triple lock figures awaited

The other

Whose Travel Warning Do You Trust?

Expats and travellers put their safety in the hands of some dubious advisers when travelling overseas, according to a new global survey.

Although just over half of travellers (55%) trust government warnings, 34% swear by the advice of family and friends, while another third prefer to follow the guidance of travel writers.

Travel agents and airlines are generally not trusted – with 26% relying on travel agents and only 10% taking airlines seriously.

Almost two thirds of British travellers trust government warnings, while travel writers are heeded more in the USA and a third of Germans take advice from travel agents.

The survey was aimed at finding out if tourists and expats take notice of government travel warnings following criticism of them being vague.

“Government alerts can devastate a country’s tourist industry,” said Nigel Vere Nicoll – CEO of the African Travel & Tourism Association (Atta).

“Kenya was virtually empty after a British Foreign Office alert last year, but recent warnings from the US State Department have been less specific and are really not that helpful to travellers or the industry.”

Sharm el Sheikh update

The British Foreign and Commonwealth Office is still warning travellers to stay away from the Egyptian resort of Sharm al Sheikh.

All flights to and from the resort and the UK have been suspended.

Passengers with tickets should contact their travel agents for updated information, says the Association of British Travel Agents (ABTA).

Chennai airport open

Heavy flooding in Chennai, India, has abated enough for flights to resume from the international airport.

Train services are also running again.

Both services are intermittent and passengers are advised to check with their airline or travel company for updates before departure.

UAE border crossing delays

Drivers crossing the border between the United Arab Emirates and Oman are facing delays at Hatta.

Many are redirected to other crossing points.

The British Embassies in both countries are suggesting drivers should add extra time to their trips to account for the delays.

More information is available by calling +968 268 49924 (Oman)

Cold War Hots Up Again As NATO Expands

If you thought the Cold War was over, then think again as relations between Russia and the West heat up.

The latest flare up is over the tiny Balkan nation of Montenegro joining the mighty North Atlantic Treaty Organisation (NATO) military machine.

Russia is still vying with the West about who exerts influence over the former satellite states of the USSR and has warned NATO about expanding eastwards out of Europe.

NATO’s invitation to Montenegro to join the club leaves just Serbia out in the cold in the buffer zone of former USSR bloc states between Russia and Europe.

Albania and Croatia joined NATO in 2009; Montenegro is expected to step up by next summer, while Bosnia and Macedonia want to join.

Other candidates include Georgia and The Ukraine, but their membership of NATO faces problems as one of the conditions of joining is all territorial disputes must be settled prior to entering the pact.

US Secretary of State John Kerry explained the invitation to Montenegro was not aimed at spiting Russia, but the move sends a signal to Moscow that the Kremlin will not influence NATO foreign policy.

What is NATO?

NATO is an alliance of countries stretching from the US and Canada in the West to Turkey in the East.

The body was formed in 1949 as an umbrella group to safeguard member countries from the threat of attack. The basic tenet of NATO is to attack one country is an attack on all.

The US invoked the treaty after the 9/11 attacks to strike back at terrorists – the only time the treaty has been invoked.

France has not called on NATO support following the jihadist outrages in Paris, but could do so under the terms of the treaty.

NATO has no standing armed forces. Manpower, weapons and equipment are provided by the 28 member states.

Which countries are NATO members?

The list with year of joining is:

Albania (2009)
Belgium (1949)
Bulgaria (2004)
Canada (1949)
Croatia (2009)
Czech Republic (1999)
Denmark (1949)
Estonia (2004)
France (1949)
Germany (1955)
Greece (1952)
Hungary (1999)
Iceland (1949)
Italy (1949)
Latvia (2004)
Lithuania (2004)
Luxembourg (1949)
Netherlands (1949)
Norway (1949)
Poland (1999)
Portugal (1949)
Romania (2004)
Slovakia (2004)
Slovenia (2004)
Spain (1982)
Turkey (1952)
United Kingdom (1949)
United States (1949)

Well-Oiled Plan Keeps Cost Of Crude Down

Saudi Arabia has switched on two huge new oil refineries that are likely to leave the price of crude languishing at around $50 a barrel for the foreseeable future.

In a war of attrition between oil producing nations, the big players are all scared of blinking first and turning off the flow in case they lose market share to their rivals.

Now, the Saudis have upped their game by offering cheaper and more efficient refining to other producers by bringing the new plants on line.

Oil refiners are reaping profits from producers with a lack of facilities who have to ship or pipe their oil to other countries for refining into the final product.

Saudi Arabia has ripped that business away from refineries further afield as the nation lies closer to many major oil producers than overseas refiners.

Shrewd move

In a shrewd business move, Saudi Arabia can still make a decent margin on refining but the overall cost is cheaper because less expensive transportation is involved in the equation.

The benefit is also felt within Saudi Arabia, which as the world’s largest oil producer, now has less of a need to share margins with out of country refineries.

The two new refineries can handle 800,000 barrels a day.

But sometime soon, something has to give in the oil market.

Production is still pumping out crude at all-time high levels, more refineries are working to turn the crude into energy products wanted by industrial and developed nations, but the storage tanks are almost full to capacity.

Cold winter hopes

Huge storage facilities in the Netherlands and Singapore report record capacity.

“A glut of oil is keeping the price down and economics says excessive supply coupled with decreasing demand will keep a lid on the gusher funding growth in the Middle East and North Africa” says James Green Devere Group

Saudi Arabia and the United Arab Emirates have already announced less public spending and are working to diversify their economies away from reliance on oil.

Many say the only hope for the price of oil is a long, cold winter in North America and Europe that will suck storage tanks dry.

But that’s a double-edged sword, because heating will increase demand at the same time as bad weather means less call for gasoline from drivers and the transport industry.