The Fatca law appears to be driving more and more U.S. citizens, who are living and working overseas, to give up their citizenship and U.S. passports. Are you feeling resistance from permanent one-way relocating employees and do you have provision to advise them on the potential implications of living abroad as a U.S. citizen?
The United States is one of only two countries in the world that has citizenship-based taxation (the other is Eritrea). As a US citizen you must file a tax return, no matter where you live, and often pay US taxes on top of the tax you already pay in your country of residence - so-called double taxation. This has been the case since the Civil War and until recently really only affected the rich. Americans abroad are given a yearly allowance of $106,000 (£73,000) before double taxation kicks in. But Fatca expands the scope of what can be taxed, and places a burden on foreign banks to identify US citizens among their customers to US tax authorities. The penalty for failing to do so can be as high as 30% of all a bank's dealings with the USA.