George Holding TTFI bill ‘now set for 2019 vote’
Legislation that its proponents have said would significantly improve the lot of America’s 5.1 million to 9 million expatriates – which had been expected to appear before the end of the year, after failing to materialize in September – is now unlikely to be presented to the House of Representatives for a vote until next year, sources report.
Sources said the latest postponement was due to the need for the bill to go back to the Legislative Commissioner’s Office for certain amendments, which means it will subsequently need to return to the Joint Committee on Taxation to again be “scored,” a legislative term for the painstaking writing of new laws that ensures they do what they’re intended to.
The legislation, which thus far has not been published nor, as far as anyone knows, yet been given a name, had been expected to be introduced by North Carolina House Rep. George Holding, as its chief sponsor.
Republicans Overseas chief executive Solomon Yue (pictured above, right, with Matt Stross, who has been working on the legislation on behalf of Rep. Holding), told the American Expat Financial News Journal that Holding’s bill “will be attached to another, bigger [tax reform] bill in 2019.”
Those American expatriates who had been holding off renouncing their citizenships in expectation that the changes to the American tax regime necessary to make it possible for them to continue to remain U.S. citizens would soon be made, Yue added, may need to go ahead with their renunciations, as it will take some time for any changes to the tax laws to take effect.
The good news about the fact of the delay, Yue went on, is that it will give those lobbying on behalf of the expat American community “an opportunity to open a second front on the matter of the non-reciprocity of the Inter-Governmental Agreements” that the U.S. currently has in force with a number of other countries, as part of its enforcement of the so-called Foreign Account Tax Compliance Act.
FATCA is a relatively new (2010) U.S. law that obliges non-U.S. financial institutions, such as banks, to report to the U.S. tax authorities on the financial accounts held by American citizens, even if those American citizens don’t live in the U.S., and even pay U.S. tax in some cases – for example, U.S. capital gains tax on the sale of a primary residence, if this isn’t taxed in the country in which they now live.
As reported, Rep. Holding has been rumoured for months to be working on legislation that would give expatriate Americans the option of replacing the U.S.’s current citizenship-based tax (CBT) regime, as it applies to them, with a “territorial taxation for individuals” (TTFI) system. Those who would prefer to continue to be taxed under the existing CBT regime could, under this legislation, be allowed to do so, acccording to those familiar with the proposed bill.
Although the rumoured legislation failed to appear before the end of September and then October, November and apparently now may not appear at all before the end of the year, Rep. Holding, who had been involved in drafting President Trump's tax reform legislation, last December's Tax Cuts and Jobs Act (TCJA), has publicly expressed his concern about the problems expatriate Americans face as a result of the way the CBT regime affects them.
The TCJA has been strongly criticised, mostly outside of the U.S., for its impact on non-U.S.-resident expatriate owners of small businesses, as it is retroactive and seeks to take a significant chunk of the equity that many expatriates have built up over their years in their overseas businesses, and had been counting on to fund their retirements.
‘TTFI bill is moving forward’
Keith Redmond, a Paris-based American expat campaigner on behalf of expatriate American issues, posted a statement on Twitter saying that the alleged legislation aimed at introducing a “territorial tax” regime for individuals, or TTFI, was in fact still “moving forward. It’s not dead.”
He added: “If it was dead, I would say so. In fact, there are major opportunities in garnering more support for TTFI from various fronts. Addressing the Accidental Americans further, [for example], is not off the table.
“Sausage-making is a slow process, especially on Capitol Hill, but this sausage preparation is going in the right direction.”
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