If you American expatriates remember, back in March, we wrote a thread about the effect of the FATCA American tax law upon Americans living in Korea. Between now and 2015 marks a transition period for foreign banks to comply with reporting guidelines issued by the US Government for reporting overseas income from Americans in Korea. You may well ask why should the Korean Government and banks do the leg work for the IRS in America, well congress decided to issue an ultimatum to world banks “report to us or we will cut you off from the American market (congress has decided to punish foreign financial institutions that refused to surrender U.S. accountholder information by cutting off their access to critical U.S. financial markets) cite.
This means, to summarize, that beginning roughly now, any American with 10,000 USD in a Korean bank or at least 50,000 USD in assets (stock, trust, etc.) will be reported to the IRS in America. You may also think that this affects only Americans but NO – it directly affects Koreans, for example, today I sat in a certain major Korean bank and watched a Korean national open a new account and, to my compete surprise, one of the documents they signed was a FATCA compliance document – all in Korean – that confirmed that the bank customer was really a Korean citizen and not an American.
I would never have imagined that the US could or would insert themselves so deeply into the common affairs of citizens of a foreign country, to this extent; requiring them to sign a document stating that they are not American citizens! This also explains why so many Americans were refused service from European banks this last year.