Last update01:19:34 PM

Back You are here: Home Legal and Finance Legal US Expat Tax Returns and FATCA

US Expat Tax Returns and FATCA

Should American expats in Greece care about FATCA? What should American expats in Greece know about FATCA? How does it affect their US expatriate tax returns?

On November 8, 2022 Treasury indicated that it has been in negotiations with over 50 countries regarding the implementation of FATCA. If you want to know more about FATCA, please read What is FATCA.

Greece is not among these 50 countries as of today. However, American expats in Greece should not think that the FATCA would not affect them.

What does FATCA mean for American expats in the Greece?

The primary goal of FATCA is to combat international tax evasion. The IRS will have an access to the accounts of American expats in Greece if they have foreign accounts in other countries like the United Kingdom. Moreover, on September 14, 2022 the U.S. signed an intergovernmental agreement with the UK. Treasury has been working relentlessly on the agreements with other European countries.

What should American expats in Greece do to comply with FATCA?

The FATCA form has a lot of duplication with the FBARs, however, there are quite a few differences. American expats living in Greece must file the FATCA form 8938 with their expatriate tax return if they meet the FATCA requirements. Per the latest FATCA developments, Americans living abroad have to file the FATCA if the aggregate value of specified foreign financial assets exceeds $200,000 (last day of the year) or $300,000 (anytime during the year). This filing threshold is higher for couples that file married filing jointly.

Several things to remember in regards to the above threshold:

First, this higher threshold is applicable only to Americans living abroad who must qualify under the "physical presence test" or "bona fide residence test". US taxpayers living abroad are not required to file the form 2555 with the form 8938 to qualify for the above threshold.

Second, American taxpayers who actually reside in the USA must file the FATCA if the aggregate value of specified foreign financial assets exceeds $50,000 (last day of the year) or $75,000 (anytime during the year) for taxpayers filing as single or married filing separately.

Which penalties will American expats in Greece pay if they fail to file the FATCA form?

Both civil and criminal penalties can be imposed for a failure to file FATCA. Civil penalties start with a $10,000 failure-to-file fee. However, this amount will be increased by an additional $10,000 penalty for each 30 days within 90 days after the IRS mails a notice regarding a failure to file Form 8938. The second round of penalties can be as much as $50,000 for each failure to file.

American expatriates living in the Greece should stay up to date with future IRS releases to avoid potential FATCA penalties.

Article courtesy of ZM Ishmurzina, MBA, CPA. She is the principal at Artio Partners.

Artio Partners is a CPA firm for American expatriates living abroad and dual citizens. We specialize in past due expat tax returns and complex international tax issues like FBAR, FATCA, foreign tax credit, foreign real estate, PFIC, foreign adoption and controlled foreign corporations. For more information please visit Expatriate Tax.