Country Reports

USA: Expiration of the Offshore Voluntary Disclosure Program

The US In­ter­nal Re­ve­nue Ser­vice (IRS) has an­noun­ced that it will com­ple­tely ter­mi­nate its cur­rent Offs­hore Volun­tary Dis­clo­sure Pro­gram (OVDP) by Sep­tem­ber 28, 2018.

The OVDP is a par­tial tax am­nesty that al­lows Ame­ri­cans, green card hol­ders and all other US tax­pay­ers to sub­se­quently re­port pre­viously un­dis­clo­sed for­eign fi­nan­cial ac­counts and thus to be sub­ject to lo­wer sanc­tions than in the event of con­ti­nued non-dis­clo­sure. The tax re­turns for the last th­ree years and the re­la­ted Re­port of For­eign Bank and Fi­nan­cial Ac­counts for the last se­ven years must be sub­mit­ted to the IRS.

USA: Expiration of the Offshore Voluntary Disclosure Program© Thinkstock


Those af­fec­ted should con­ti­nue to use the OVDP un­til Au­gust 29, 2018 to take ad­van­tage of the tax am­nesty. At pre­sent, it can­not be ru­led out that other­wise, US in­come may be ta­xed wi­thout a time li­mit, and flat-rate fi­nes of USD 5,000 per as­sess­ment pe­riod may have to be paid. We would be plea­sed to as­sist you with ti­mely de­cla­ra­tion.

In the me­an­time, banks and in­surance com­pa­nies have star­ted to ask their cu­st­omers whe­ther they are US ci­ti­zens or are sub­ject to US tax lia­bi­lity for other re­asons. In this con­nec­tion, they must fill out tax form W-9 or W-8BEN. This in­for­ma­tion is pas­sed on to the IRS, so that the IRS will have far more de­tec­tion op­ti­ons. If no Form W9 or Form W-8BEN has been sub­mit­ted, wi­th­hol­ding tax of 30% will be wi­th­held when funds from the USA flow into fi­nan­cial ac­counts ab­road.

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