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The Top Countries for Offshore Accounts

Posted in Offshore Account Update on September 15, 2017

There are many reasons to make offshore investments with foreign financial institutions, including diversifying your investment holdings, investing in different currencies, and protecting yourself in case of financial or political disasters.  However, offshore accounts are often treated with suspicion because taxing authorities believe investors with foreign financial accounts regularly fail to report those accounts to taxing authorities in their home country.

Global efforts to fight tax evasion have resulted in new requirements being imposed in recent years on financial institutions that hold accounts for foreign investors. For example, banks which have accounts owned or controlled by U.S. affiliated taxpayers are required to comply with certain disclosure requirements. Individual investors who have offshore accounts or who are signatories on offshore accounts are also required to provide disclosures under FATCA as well as to file an annual Report of Foreign Bank and Financial Account. 

The global efforts to crack down on tax evasion have taken many forms, including the U.S. Department of Justice creating an amnesty program encouraging banks to come forward, report how they helped fight tax evasion, pay fines and turn over information on accountholders --- all in exchange for avoiding criminal prosecution and harsh penalties.  As banks have turned over customer information, ending a decades-long tradition of strong banking privacy in many countries, the global financial landscape has changed.

Still, investors continue to put their money offshore – and there are certain locations where the use of offshore wealth havens are more popular than others. As MarketWatch explains, the use of offshore tax havens is more popular in countries where there are high levels of political instability or economic instability. Abundant natural resources and proximity to Switzerland are other popular reasons for the wealthy to invest offshore.

If you are one of the investors with your funds in a foreign financial institution, you need to know the compliance rules and be proactive in protecting yourself if you are not in full compliance with U.S. tax laws.Otherwise, you could find yourself being investigating and facing harsh penalties.  A Washington DC tax evasion attorney can provide you with guidance on your options and can help you to develop an appropriate strategy for protecting your investments.

Who is Putting Money in Offshore Tax Havens?

Despite changes in the way banking privacy works, new FATCA reporting requirements and myriad other changes to how international banking works, there are still many investors who want to keep their money in offshore accounts.

MarketWatch reported on a study that evaluated the use of offshore wealth havens as a proportion of GDP. According to MarketWatch, the top locales for the use of offshore wealth havens include UnitedArab Emirates, Venezuela, Saudi Arabia, Russia, and Argentina. Other top locales for offshore investing include Greece, Taiwan, Portugal, Turkey and many countries in Western Europe.

The researchers discovered that the use of offshore wealth havens was not directly linked to high tax rates, but there was a link between increased wealth and tax evasion.  However, not everyone who keeps funds offshore is evading taxes, and it can be frustrating to come under suspicion simply because you want to invest in a financial account in a foreign country.

In order to protect yourself, it is important to comply fully with tax laws if you are going to have an account offshore. A Washington DC tax evasion attorney like Kevin Thorn can help you to understand the rules and can assist you if you believe that you could face problems due to lack of compliance with tax requirements.


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"Mr. Thorn and the attorneys at Thorn Law Group were so knowledgeable about the IRS Voluntary Disclosure Program and about the way the IRS Criminal Investigation Division works. Mr. Thorn helped put my mind at ease and walked me through the whole Voluntary Disclosure process. With the help of Thorn Law Group, and Mr. Thorn specifically, we were able to get back into compliance and were able to avoid criminal prosecution."