The issue of ‘Accidental Americans’ and what the EU is doing to help

Accidental Americans are EU citizens who solely by virtue of being born on US soil acquired US citizenship, but apart from that they have no other ties to the country. Crucially, the US is unique in the world by taxing according to citizenship, not residency, and by doing so seeks tax compliance and revenue from residents of other countries. This inevitably leads to double taxation and complex and expensive tax compliance.

In recent years the US implemented the Foreign Account Tax Compliance Act (FATCA) – an extraterritorial law which forces banks globally to report the details of all their customers considered to have US indicia to the IRS. For Accidental Americans who are European citizens, FATCA breaches the right to data privacy (Article 8) and the right to non-discrimination (Article 14) of the European Convention of Human Rights (ECHR).

The United States also puts significant financial and administrative hurdles in the way of renouncing citizenship, such as charging the world’s highest fee of $2350 and requiring 5 years of tax compliance. This is a breach of Article 15 of the Universal Declaration of Human Rights - the right to change nationality.

The Petitions Committee in the European Parliament has drafted the oral question on the matter and the resolution on the committee vote, which will take place in June, is still being discussed with other political Groups. The committee also recently published a study on FATCA and its application at international and EU level which is available to read here: http://www.europarl.europa.eu/RegData/etudes/STUD/2018/604967/IPOL_STU(2018)604967_EN.pdf.

The EU Commission also acknowledged some of FATCA’s shortcomings that have an “unintended effect” on Accidental Americans in the EU. The Commission is also currently working with the financial industry to gather more information on how many residents in the EU might have difficulties obtaining financial services as a result of the above reasons.

Jude Kirton-Darling MEP, who sits on the Petitions Committee in the European Parliament where these issues were first heard last year, has supported the petitions and wants to see a commitment across the whole of the EU to addressing the problem that has caused so much hardship to some EU citizens.

Labour MEPs will continue to support Accidental Americans in Europe and their families in the parliament-wide discussion which will take place during the plenary session this July.

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