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Nexia Ebner Stolz

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

Note

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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