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Financial Blog Corliss Group: For Americans in China, the Taxman Cometh

Financial Blog Corliss Group: For Americans in China, the Taxman Cometh | Corliss Online Financial Mag | Scoop.it
The long arm of the American tax man has officially reached its way to Hong Kong. The question is, will it extend to the rest of China?
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The long arm of the American tax man has officially reached its way to Hong Kong. The question is, will it extend to the rest of China?

 

Hong Kong, a special administrative region of China, signed an agreement with the U.S. on Tuesday to share tax information about Americans who work or have assets in the southern Chinese city. The agreement is part of the U.S. government’s global campaign against tax evasion and an attempt to recover an estimated billions worth of lost revenue.

 

The information-sharing agreement is strictly that – the two tax authorities will trade files on an individual if one authority asks for it. Since Hong Kong doesn’t demand taxes from its residents who live abroad, it’s likely the information sharing will be a one-way exchange.

More importantly, the agreement is a precursor to an expected inter-governmental deal that will see the enforcement of the U.S. Foreign Account Tax Compliance Act, or FATCA, in Hong Kong. Under such an agreement, the U.S. government would require financialinstitutions to disclose details about American-held bank accounts to the U.S.

 

Initially slated to take force in January of this year, FATCA requires all U.S. citizens and green card holders who reside outside the U.S. to disclose their accounts and financial information. It’s triggered a substantial backlash: Many in Asia have given up their U.S. citizenship or green cards rather than put up with all the paperwork and additional tax liabilities. At the same time, many private banks in Hong Kong have begun refusing to take on the accounts of U.S.

citizens and green card-holders, saying the cost of the tax-related paperwork is too great

 

Though FATCA has been in the works for years, its implementation has been delayed to July 1, partly because many countries haven’t yet signed agreements to abide by its rules. In Asia, only Japan has signed an intergovernmental deals to be fully FATCA-compliant. Hong Kong said on Tuesday a deal is in the works.

 

Now, all eyes are on China and how the rest of the country will deal with the FATCA.

 

“The general expectation is that that China will sign,” said Charles Kinsley, tax partner at KPMG in Hong Kong. “Many mainland financial institutions in China are already working on FATCA projects.” (Take note, rich Chinese investors looking for green cards in the U.S.)

 

What’s at risk if a country doesn’t sign on? A lot of headache for its banks. The U.S. has said that financial institutions from countries who don’t sign onto a FATCA agreement will be subject to a 30% withholding tax from any of its U.S.-related business. For that reason, many banks and other financial companies are hoping their home governments sign on.

 

“For Hong Kong’s financial institutions, this is a good thing,” said Mr. Kinsley of Hong Kong’s Tuesday announcement.

 

As for Americans who hope to avoid the IRS by stashing cash in foreign bank accounts? “They’re certainly going to be under pressure,” he said. “Banking secrecy is the thing of the past.”

 

Article Source:

http://blogs.wsj.com/chinarealtime/2014/03/26/for-americans-in-china-the-taxman-cometh/ ;


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Manipulated News and Online Review Website Corliss Online Group Financial Magazine

 

Talking about risk, trading in stock is an area not many people would want to enter as they would want enough assurance that their investment will not only be protected but that they would make a profit out of it in the short-term or the long-term. The website provides some parameters for measuring and controlling risks involved in stock trading.

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For the beginner or student, risk may not be such a real factor until he or she actually invests real money in the market. We all know that our money will still be at risk whether it remains in our pocket, in the bank or in the stock market. The potential for making big profit, however, is the come-on that the industry hopes to utilize to encourage more and more people to invest into it.

 

But risk is just one of the many hurdles one must face in stock trading. Even when one makes an earning from one’s investments, there are some factors to consider, such as capital gains tax, income tax and even stamp tax. How do these taxes affect one’s earnings? And by how much? Are they minimal in amount or substantial that after all has been computed, do you still enjoy a big percentage of earning? Are all these costs, including broker’s fees and one’s pre-buying/educational expenses, really worth the effort of joining this treasure hunt?

 

The ultimate question then is this: Is there a minimum amount of money one must have in order to be a sensible, no-nonsense player in the stock market? How much? And would a person casually spending loose change while in the process of learning or gaining enough experience merely be wasting time or is he or she getting enough exposure to obtain the necessary expertise to become a big-time player eventually?

 

We can be sure all these questions will be answered in one of those advertised seminars. But then again, one would have to part with one’s precious money to find out. It seems one will always have to risk one’s time, effort and money to hope to gain something out of it. This is expected, of course. No one would put up a website on stock trading merely for fun. We are not asking for free seminars either, although that might be a good idea to start with. Perhaps, a free virtual tour of the stock market or a peek into the stock market floor (via YouTube?) might be enough of a great service for those unconvinced or sceptical souls among us to take the first step.

 

In the end, one must trust what the website is talking about and is hoping to provide in terms of service and assistance for beginner stock-traders. It may take a lot of time and effort to do it through an almost plain, not-so-interactive website; but, hopefully, it can be done through a few improvements here and there.

 

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http://corlissonlinegroup.com/stock.html

http://corlissonlinegroup.com/share.html

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