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Expat Focus International Finance Update 08 February 2017

  Posted Wednesday February 08, 2017 (11:08:23)   (9560 Reads)


 

US expats face travel ban

US expats who have not paid their taxes may lose their passport and the right to travel under a law that was approved by Congress.

Known as the 'Revocation or Denial of Passport in Case of Certain Tax Delinquencies', tax code Section 7345 is not restricted to criminal tax cases but can be used if the Internal Revenue Service (IRS) believes an expat is about to flee the United States and wants to restrict their movements.

The idea behind the law is to restrict travel as a means to enforcing tax collections and while it was proposed and rejected five years ago, it was passed in 2015 and then signed by President Obama.

Now the IRS has released details of the law on its website. Expats who are in tax debt may have their details passed to the State Department, who then may not renew or issue a passport after receiving this notification.

The notifications are set to begin this year and the IRS has defined delinquent tax debt as being a federal tax debt worth more than $50,000, which includes penalties and interest that is legally enforceable.


Tax traps for the unwary US expat

Meanwhile, the millions of US expats living overseas are being warned they need to be aware of their tax filing dates over the coming months.

They have until 18 April to file their annual income tax return, though they will get an automatic extension to 15 June. However, any tax owed must be paid by the 18 April deadline.

The expats are being warned by tax experts that they need to comply with foreign bank and financial account reporting rules which carry financial penalties for late and non-filing.

For instance, American expats who do not file an FBAR (Foreign Bank and Financial Accounts) could be facing a $10,000 penalty which could rise to $100,000 for those who have knowingly flouted the rules.

Essentially, American citizens who have foreign accounts with more than $10,000 in them must comply with the law and reveal them.


Expat jobs in GCC will be slashed during 2017

Expats will continue to lose their jobs in the GCC region in 2017, though at a lower rate than last year, according to a survey.

The findings from recruitment consultants GulfTalent reveal that 45% of employers in Saudi Arabia are looking to reduce expat numbers this year, compared with 15% of employers in the UAE.

Across the GCC region, the number of firms reducing their number of employees has fallen to 23%, a big fall from 40% of firms who said they would lay off staff this time last year.

However, the number of employers looking to expand their workforce numbers has risen to 47% from 41% last year.

A spokesman for the firm said Saudi Arabia is an exception to the employment trend in the region because of its high dependence on revenues from oil.

Of the sectors reporting on their confidence for the future, the most optimistic of those are found in manufacturing, with 58% of employers saying they will boost their job numbers this year, followed by those in the healthcare sector with 55%.

The report highlights that the growing population in the GCC region is also fuelling demand for medical cover and healthcare which, in turn, is boosting demand for doctors and those who work in the medical field.

While banks are also looking to boost their workforce, the oil and gas sectors say they will continue to downsize in 2017, though the worst performing sector will be construction where 45% of firms said they were looking to reduce staff numbers.


Irish expats urged to return home to work

Irish expats are being urged to return home to fill job vacancies being created by the country's construction boom.

The call comes from building companies who say they need 112,000 extra employees to meet growing demand over the coming three years.

The country’s Construction Industry Federation says it needs 31,000 joiners and carpenters, 28,000 labourers, 12,000 plumbers and 14,000 plasterers to begin work on projects worth several billion euros.

Now employers are actively targeting those expats who have moved overseas when the Irish economy hit problems during the economic crash in a bid to tempt them home with well-paid jobs.


Expat pension scammers on the rise

Hot on the heels of a warning from the Financial Conduct Authority about British expats being targeted by fraudsters comes news that there is a growing trend of another pension scam.

The RSM Pension Fraud Risk report reveals that the number of cases involving the family of an expat not revealing that their family member has died to the fact to the expat’s pension provider is increasing.

This means they continue claiming their relative's pension until the pension fund administrator is made aware of the change in circumstances.

This is just part of a £19 million loss to pension funds through scams last year, says the RSM, a network of accountants and consultants, which says that the pension fund administrators are finding it increasingly difficult to keep track of its expat retiree beneficiaries.


Expats urged to transfer $90 every month

Egyptian expats are being urged to transfer $90 every month into their bank accounts to help support their home country's economy.

The call has been made by an Egyptian diplomat in Saudi Arabia, who said the initiative could raise several billions of dollars every year.

The plea was made during a briefing to Egyptian expats working and living in Saudi Arabia about the country's efforts to reform its economy.


Cost of car ownership for expats revealed

One of the issues for many expats moving overseas is the cost of running a car in the new country, and now a survey has revealed what those costs might be.

LeasePlan has calculated how much it costs to drive and own a car in Europe and found that Norwegians are paying more than anyone else.

It costs around €708 every month to run a petrol car in Norway, which is twice the cost of running the same car in Hungary, where drivers are paying €364.

The most expensive country for running a diesel car is the Netherlands where it costs €695 a month, whereas in Hungary it costs just €369 a month.

The firm's survey analysed the car ownership costs in 24 European countries including its cost price, depreciation, maintenance, taxes and insurance as well as fuel expenses.


Oman cracks down on expats illegally buying property

The government in Oman has announced steps to crack down on expats who buy property in the country by entering an illegal agreement with an Omani citizen.

The Ministry of Housing says it is looking at ways to tackle a growing issue of expats buying property outside of the country's 'integrated tourism complexes' (ITC).

Under proposed new rules, those buying real estate in Oman will need to declare that their investment is safe and that the citizen is the '100% owner'.

Currently, expats can only buy investment or residential real estate in ITCs, which tend to be more expensive than in other areas.


In other financial news...

Expats and expat employers in France are being warned that a National Front government would tax their contracts in a bid to boost employment for French citizens. In a speech to launch her presidential bid, Marine Le Pen said she would also curb immigration and restrict free education to French people.

Expats working in Kuwait's public sector may be forced to retire when they reach 60 years of age, says the country's Civil Service Commission. The move would boost job opportunities for citizens and would cover all state institutions and ministries. A decision on the proposal will be made soon.

International schools in Japan say there is a shortage of spaces following a boom in the number of skilled expats moving to the country with their families. They highlight that the costs involved for expats to send their child to an international school in Japan are also rising quickly.

Indian expats are helping to fuel a rise in real estate prices in their home country as they return home from overseas assignments to buy property. There's also been a big rise in the number of non-resident Indians buying property while working overseas, and now property experts there say they are a 'dominant force' in the sector.

Authorities in Jordan have revealed that there are 1.4 million expats working in the country, around 1 million of whom are illegal immigrants, and they remit around $1.5 billion every year to their home countries.


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