AAWE Tax & FATCA survey

AAWE Tax and FATCA Survey

This survey was undertaken by AAWE, the Association of American Women in Europe, in order to better understand the issues and challenges that overseas Americans face with respect to US taxation and FATCA. A report on the survey findings will be presented and actions will be undertaken to address the issues reported by participants.

This survey was a non-commercial undertaking and results will not be used for any commercial purpose. Responses were entirely anonymous and no records identifying those who complete this survey were kept.

For any further information or to discuss survey findings and further action, please contact This email address is being protected from spambots. You need JavaScript enabled to view it..


BrochureAAWETaxSurveyClick here to read partial results of the AAWE Tax and FATCA Survey. »

Some of the most salient information collected in the survey is as follows:

Reasons for leaving the United States: The large majority of the participants (67%) left the United States to live overseas “for love” (in order to join a romantic partner) or for professional opportunities. Others left “for adventure,” to fulfill family obligations, or for studies, and many left with their families when they were small children. Just one participant reported leaving the United States for the purpose of avoiding US taxation. (Appendix 2 Figure 8).

Incomes of US citizens living outside the United States: The large majority of the survey participants are not wealthy: 67% of the participants report individual annual income of $70,000 or less, with 44% reporting individual income of $40,000 or less. With respect to household annual income, 39% report $70,000 or less with 20% reporting $40,000 or less. Just 1% report individual annual income over $300,000 and just 6% report household annual income over $300,000. (Appendix 2 Figures 10-11).

Experiences with US non-resident taxation: Just 11.6% of the participants report not having any problems with respect to US non-resident taxation. In contrast, 41.8% report that they pay significant fees to a professional tax preparer in spite of owing no US taxes, and 38.7% report that they have trouble planning their finances in a manner that makes sense under two different tax systems and thus are penalized financially. Entrepreneurs and owners of small businesses report additional difficulties: 37% report being subject to additional (expensive) filing obligations and 41% report being subject to financial hardship under the 2017 Tax Cuts and Jobs Act, in particular as a result of the Repatriation Tax and GILTI. (Analysis Parts IA-IC; Appendix 2 Figures 13-15, 19, 21, 24).

Experiences with FATCA: Just 14.7% of the participants report not having any problems as a result of FATCA. In contrast, 32.4% report that they have been barred from investments, 30.8% report that they have been unable to open one or more bank accounts, 14.7% report the closure of one or more existing accounts, and 13.4% report that they have been removed as a joint holder from one or more accounts. (Analysis Parts ID-IF; Appendix 2 Figures 25, 27-29, 31, 37).
    
Who is most affected: No one type of person is spared, but certain types of persons are affected differently or more severely than others: The residents of Switzerland and Australia experience the most hardships at considerably higher rates than the residents of most other countries. As examples: (i) 66% of Swiss residents and 62% of Australian residents suffer from the incompatibly of tax systems making investing and planning for retirement difficult and resulting in financial penalization, and (ii) 72% of Swiss residents and 31% of Australian residents have been unable to open one or more bank accounts. (Analysis Part IIB; Appendix 2 Figures 14-24, 26-37).

Men suffer a number of hardships at greater rates than women, such as the incompatibility of the tax systems resulting in financial penalization (53% vs. 36%) and being barred from certain investments (49% vs. 30%). But certain other hardships women suffer at greater rates than men, such as being removed from joint accounts (14% vs. 13%). (Analysis Part IIA; Appendix 2 Figures 15, 27, 31).

Given the underlying issues pertain to income and investments, it should not come as a surprise that those with higher incomes and more money to invest suffer more hardships at greater rates. For example, 25% of those with individual income over $300,000 have not been able to accept or remain in a position of employment because of their US citizenship; just 3% of those with individual income of $1 to $20,000 have experienced this hardship. (Analysis Part IIC; Appendix 2 Figure 35). This does not mean, however, that those with lower incomes and/or less money to invest do not suffer other hardships at high rates. Here are just two examples:

-    24% of those with individual  income of $0 and 38% of those with individual income of $1 to $20,000 pay significant fees to a professional tax preparer in spite of owing no US taxes; and

-    14% of those with individual income of $0 and 19% of those with individual income of $1 to $20,000 have been removed from one or more joint accounts. In contrast, not a single participant reporting annual individual income of over $300,000 has been removed from any joint account. (Analysis PartIIC; Appendix 2 Figures 14, 31).

The participants submitted a number of comments more specifically describing the hardships that they are facing and their most preoccupying fears and concerns (Appendix 3). A common emotional theme runs through the comments in their frequent usage of words like “afraid,” horrified,” “nightmare,” “danger,” “betrayed,” “vulnerable,” “anxiety,” and “desperate.” (Analysis Part IIIA). Of all these comments, perhaps this one best sums up the situation of US citizens living overseas: “I feel threatened by my very identity.” (Appendix 3 Comment 9).

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