According to Bloomberg, last Friday July 19, 2019, the Conseil d’Etat in France ruled that French tax authorities can exchange tax information with their counterparts in the United States. The ruling rejected a petition by nationals with dual citizenship (French and American) who have been trying for years to stop the French government from cooperating with the U.S. under the Foreign Account Tax Compliance Act (FATCA).
The Conseil d’Etat ruled that the measures implemented by the French government to comply with FATCA do not contravene the privacy laws of that country. It also rejected the argument that the United States does not cooperate adequately with French tax authorities in return.
Problems for American Expats
When France signed FATCA in 2013, it was with the goal of stopping people from committing tax evasion. However, it also created problems for American expats with dual citizenship and modest incomes who had been rejected by retail banks in France seeking to avoid the problems and risks associated with complying with FATCA.
As we indicated previously, we thought that if the Conseil d’Etat had ruled the opposite way, it would trigger other countries and jurisdictions to commence judicial proceedings to annul or revoke FATCA, especially in Mexico. Nevertheless, we think this will not be the case now, at least in the immediate future.
Mexico May Have Its Own Reasons to Reject FATCA
Notwithstanding the foregoing, and as we have said before, the case of Mexico is different from all others because legal formalities were not followed when this intergovernmental agreement was made, so it may not be an enforceable agreement. Because constitutional rules were also violated, the FATCA agreement may be vulnerable to questions of legality and constitutionality in Mexico.
We Offer Complete Business Planning Services
As you oversee the growth of your business ventures in the U.S., Latin America, and around the world, you'll need an experienced, dual-licensed and billingual international business planning attorney to take care of all of your legal needs. At MEG International, we make every effort to ensure that our Latin American clients feel comfortable doing business wherever they are and that they are given the respect they have earned as savvy and successful business people. Contact us online or call us today at (800) 694-6604. Our firm will provide you with trustworthy and reliable representation so you can get the peace of mind of having made the right decisions.