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A Global Perspective on Citizenship Taxation

52 Pages Posted: 18 Jan 2016 Last revised: 17 Sep 2017

Allison Christians

McGill University - Faculty of Law

Date Written: January 18, 2016

Abstract

Across the globe, banks are flagging accounts with indicia indicating their owners may be "US Persons", making it possible for the United States to enforce its taxation of nonresident citizens extraterritorially for the first time in history. The indicia method constitutes a mining expedition for US citizens carried out by foreign banks and governments. Establishing a tax jurisdiction in this manner is unprecedented, enlisting major foreign assistance to dramatically expand the enforcement of the U.S. tax jurisdiction over a globally dispersed population, after a century of neglect and apparent indifference. While supporting effective information exchange as to residents aligns with globally accepted tax jurisdiction norms, the reach to nonresident US citizens is not. Unexamined acquiescence to U.S. citizenship-based taxation is not warranted; consistent with international law, other governments can and should protest that the U.S. tax reach deviates from fundamental international tax norms and virtually universal practices, violates the core international law principle of nonintervention, and compels states to visit unnecessary harms upon their own populations. No other state should be willing to assist in effectuating the injustice that must follow from the U.S. effort to tax nonresidents on a worldwide basis on the sole grounds of their status as U.S. citizens. The international community would be justified to, at minimum, insist that the United States catalogue its own taxpayer population, inform this population of its status, and educate it of the attendant obligations, before turning to other countries to assist in the task.

Keywords: FATCA, citizenship, taxpayer rights, taxation, tax policy, administration, global governance, international relations

JEL Classification: H11, H21, H87, F02, F50, F53, F59, Z13, E63, H2, K33, K34, N40, P45

Suggested Citation

Christians, Allison, A Global Perspective on Citizenship Taxation (January 18, 2016). Michigan Journal of International Law, Vol. 38, No. 2, 2017. Available at SSRN: https://ssrn.com/abstract=2717367 or http://dx.doi.org/10.2139/ssrn.2717367

Allison Christians (Contact Author)

McGill University - Faculty of Law ( email )

3644 Rue Peel
Montréal, Quebec
Canada

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