Offshore Bank Account for US Citizens
While there are plenty of legal ways to take advantage of offshore banking, there are some who do not always follow the law when dealing with an offshore bank account. United States president Barack Obama vows to change this, and aides are talking about introducing a bill to Congress that would limit offshore banking for U.S. persons.
A similar bill was actually introduced into the Senate by Obama in 2007. Mondaq reports on the restrictions the legisation would place on offshore banking: The STHAA would restrict the use of offshore financial centers by US persons by (i) imposing a rebuttable presumption that certain transactions between US persons and entities located in certain offshore jurisdictions are taxable, (ii) raising reporting and withholding requirements on financial institutions and fiduciaries dealing with offshore jurisdictions, and (iii) increasing penalties for tax avoidance through offshore jurisdictions.The law, if passed, could conceivably result in $50 billion of annual revenue for the U.S.
The new laws would make it more difficult for Americans to claim that they do not have control over offshore entities, and would reduce the tax haven nature of some offshore bank account functions. However, even with tighter regulation, offshore banking would still present good opportunities for asset shelter and other advantages in terms of doing business in other countries and making foreign investments.