Foreign Account Tax Compliance Act in Greece

More and more Greek-Americans that have bank accounts in Greece are receiving notices from their Banks requesting that they sign W-8 or W-9 (in some instances -though incorrectly-) statements. Some have actually reported that the Banks are taking measures such as freezing their accounts (an act that is not legal under Greek Law) until they comply with the bank’s demand. This is expected to become a serious issue, as many Greek Americans are unaware of the obligations that come along with their United States citizenship. The United States is one of the few countries that impose a mandatory tax filing obligation to all their citizens, regardless of their place of residency or whether they actually earn any income in the United States. This mandatory tax filing obligation applies for all single persons with an annual income of more than $10,000 and married persons with an annual family income exceeding $20,000. The law refers to world-wide income; this means, in essence, that even a person that has been born in the United States but has never lived there or earned any income there, is obliged to file U.S. income tax returns as long as said person earns more than the above minimum amounts anywhere in the world. FBAR (Report of Foreign Bank and Financial Accounts) also requires that U.S. citizens report any and all foreign bank accounts (or financial accounts) they have world-wide if the total balance in said accounts exceeds the amount of $10,000 at any given point. This affects a vast number of people who (although not living in the US) will now need to file yearly taxes in the United States. The penalties for non-compliance are quite severe: imprisonment for up to 5 years and/or a fine that may amount up to 50% of the person’s total savings.
It should be noted that the obligation to file tax returns does not necessarily mean that the person will actually be taxed. In fact, there is currently a tax exemption for a yearly income up to approximately $97,000 and there is a bi-lateral Treaty between the U.S. and Greece preventing double taxation for the same income. Therefore, it is imperative that all persons that have U.S. citizenship comply with their US Tax obligations to avoid exposing themselves to potentially severe penalties (both criminal and financial).

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