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February 14, 2012, 12:11 AM EST

By Steven Sloan and Richard Rubin

(Updates starting with Hintzke comment in third paragraph.)

Feb. 8 (Bloomberg) -- The U.S. Treasury Department and the Internal Revenue Service are trying to make it easier for overseas banks to comply with a tax withholding and information- collection requirement for some U.S. clients.

Regulations proposed today would allow overseas banks to use information they already collect to comply with due diligence requirements, the Treasury said in a press release today. The proposal would delay the implementation schedule under which foreign financial institutions must report information about their customers. The regulations also would expand the range of financial institutions that won’t be required to enter into formal agreements with the IRS.

“It’s clear that Treasury has been listening to the comments and they’re responding to them,” said Denise Hintzke, global leader for foreign account tax compliance at Deloitte Tax LLP. “These regulations are moving, I think, forward in making these provisions workable for the industry.”

The announcement is intended to address concerns of overseas financial institutions while making it clear that the U.S. plans to implement the Foreign Account Tax Compliance Act, or FATCA. The 2010 law requires banks to withhold 30 percent from “certain U.S.-connected payments” to the accounts of U.S. clients who don’t disclose enough information to the IRS.

“When taxpayers overseas avoid paying what they owe, other Americans have to bear a disproportionate share of the tax burden,” Emily McMahon, the Treasury’s acting assistant secretary for tax policy, said in the press release. “FATCA is an important part of the U.S. government’s effort to address that issue and these regulations implement FATCA in a way that is targeted and efficient.”

Toronto-Dominion

Overseas financial institutions including Toronto-Dominion Bank of Canada, Allianz SE of Germany and Aegon NV of the Netherlands have said previous versions of FATCA were too complex. In some cases, the reporting requirements under U.S. law conflicted with bank secrecy laws and other banking regulations.

U.S. citizens living outside the country have complained about the burden created by the reporting requirement, which can apply to people who have never lived in the U.S. and whose parents were U.S. citizens.

The Treasury said it wouldn’t exempt any country from FATCA’s compliance requirements. The U.S. also issued a joint statement with France, Germany, Italy, Spain and the U.K. to enforce the law.

“The United States is willing to reciprocate in collecting and exchanging on an automatic basis information on accounts held in U.S. financial institutions by residents of France, Germany, Italy, Spain and the United Kingdom,” according to the statement. “The approach under discussion, therefore, would enhance compliance and facilitate enforcement to the benefit of all parties.”

Step Forward

Michael Mundaca, who preceded McMahon as the U.S. Treasury’s top tax policy official, said in a statement that the international cooperation marked a significant step forward.

“I imagine Treasury will now approach other governments about adopting this model, if they haven’t already done so,” said Mundaca, now co-leader of the Americas Tax Center at Ernst & Young LLP. “It will be interesting to see how other countries and especially other financial centers react.”

Several countries where U.S. citizens hold assets, including Canada and Switzerland, weren’t included in the agreement.

James Mastracchio, a tax partner at Baker & Hostetler LLP in Washington, said the U.S. is trying to respond to concerns from other governments and banks around the world about the reach of the U.S. law.

“If we do this, what’s to stop any other country from doing this?” he said in an interview.

Bigger Accounts

The changes proposed today also would require the financial institutions to do paper searches of fewer accounts for U.S. connections. The rules would limit more labor-intensive efforts to accounts with more than $1 million.

“It’s really just the bigger accounts,” Hintzke said.

Ken Bentsen, executive vice president for public policy and advocacy at the Securities Industry and Financial Markets Association in Washington, said his group welcomes the additional time to comply with some of the law’s requirements.

“Nevertheless,” he said in a statement, “implementation of FATCA will impose significant challenges and costs for many United States financial services firms and their customers.

Members of his group include units of Barclays Plc, UBS AG and BNP Paribas SA.

--Editors: Jodi Schneider, Bob Drummond

To contact the reporters on this story: Steven Sloan in Washington at ssloan7@bloomberg.net; Richard Rubin in Washington at rrubin12@bloomberg.net

To contact the editor responsible for this story: Jodi Schneider at jschneider50@bloomberg.net

More here:
Treasury Proposes Easing Offshore Bank Tax Compliance Burden

Suncorp Group is the latest financial services company to announce redundancies, by sending 65 accounting positions to India.

Finance Sector Union (FSU) national secretary Leon Carter said two thirds of the positions would come from Brisbane and the remainder NSW.

Mr Carter said Suncorp had now moved 203 jobs offshore in the past six months, including 50 roles in claims, 17 in Suncorp Business Services, 71 roles in personal insurance and 65 roles in accounting.

"Suncorp's offshoring program appears to be gaining pace with the company announcing another 65 jobs will head to India in 2012," Mr Carter said in a statement.

The FSU says some of the affected staff are involved in compiling the insurance and banking company's half yearly and annual reports.

The redundancies announced on Wednesday came a fortnight after Suncorp confirmed 71 roles would be sent offshore.

"At this rate, employment opportunities for the next generation of finance workers will be severely limited," Mr Carter said.

A Suncorp spokeswoman said many employees felt "really burnt" after putting in long hours to assist Queensland flood victims with insurance claims last year.

While Suncorp would not reveal the exact number of redundancies, a spokeswoman said some staff would be offered other roles within the company.

She said the 65 positions quoted by FSU did not consider "immediate redeployment" and "expression of interest opportunities".

"We expect that the net number of roles impacted will likely be around 40," she said.

"We are currently in consultation with the impacted employees regarding our intention to engage a partner company to undertake some of our back office accounting functions.

"Our preference is to redeploy these people across the group, where possible."

She said the group anticipates its employee base will decline over the medium term.

On Tuesday Macquarie Group said it planned to cut 10 per cent of its investment banking jobs and last week Westpac briefed workers about 410 job cuts and positions it would relocate to India as part of a group-wide restructure.

FSU figures released in January showed National Australia Bank, ANZ Banking Group, Westpac and Commonwealth Bank collectively made 3,309 roles redundant in 2011.

Suncorp shares were up 29 cents at $8.47 on Wednesday.

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Suncorp to send 65 more jobs offshore: FSU

Suncorp Group is the latest financial services company to announce redundancies, by sending 65 accounting positions to India.

Finance Sector Union (FSU) national secretary Leon Carter said two thirds of the positions would come from Brisbane and the remainder NSW.

Mr Carter said Suncorp had now moved 203 jobs offshore in the past six months, including 50 roles in claims, 17 in Suncorp Business Services, 71 roles in personal insurance and 65 roles in accounting.

'Suncorp's offshoring program appears to be gaining pace with the company announcing another 65 jobs will head to India in 2012,' Mr Carter said in a statement.

The FSU says some of the affected staff are involved in compiling the insurance and banking company's half yearly and annual reports.

The redundancies announced on Wednesday came a fortnight after Suncorp confirmed 71 roles would be sent offshore.

'At this rate, employment opportunities for the next generation of finance workers will be severely limited,' Mr Carter said.

A Suncorp spokeswoman said many employees felt 'really burnt' after putting in long hours to assist Queensland flood victims with insurance claims last year.

While Suncorp would not reveal the exact number of redundancies, a spokeswoman said some staff would be offered other roles within the company.

She said the 65 positions quoted by FSU did not consider 'immediate redeployment' and 'expression of interest opportunities'.

'We expect that the net number of roles impacted will likely be around 40,' she said.

'We are currently in consultation with the impacted employees regarding our intention to engage a partner company to undertake some of our back office accounting functions.

'Our preference is to redeploy these people across the group, where possible.'

She said the group anticipates its employee base will decline over the medium term.

On Tuesday Macquarie Group said it planned to cut 10 per cent of its investment banking jobs and last week Westpac briefed workers about 410 job cuts and positions it would relocate to India as part of a group-wide restructure.

FSU figures released in January showed National Australia Bank, ANZ Banking Group, Westpac and Commonwealth Bank collectively made 3,309 roles redundant in 2011.

At 1527 AEDT Suncorp shares were 30 cents, or 3.7 per cent, higher at $8.48.

Go here to read the rest:
Suncorp to send 65 more jobs offshore

February 09, 2012, 6:53 AM EST

By Steven Sloan

Feb. 8 (Bloomberg) -- The U.S. Treasury Department and Internal Revenue Service are providing additional guidance to offshore banks on how to comply with a tax withholding requirement for some of their U.S. clients.

The proposed regulations will reduce the burdens on overseas banks by allowing them to use information they already collect to comply with due diligence requirements, the Treasury said in a press release today. The proposal will also adjust the withholding requirement’s implementation schedule and expand the range of financial institutions that won’t have to enter into formal agreements with the U.S. Internal Revenue Service

The Foreign Account Tax Compliance Act, or FATCA, implements a 2010 law that Congress passed to discourage offshore tax evasion. It requires overseas banks to make withholdings from U.S. clients who fail to disclose enough identifying information to the IRS.

--Editors: Jodi Schneider, Steven Komarow

To contact the reporter on this story: Steven Sloan in Washington at ssloan7@bloomberg.net

To contact the editor responsible for this story: Jodi Schneider at jschneider50@bloomberg.net

The rest is here:
U.S. Seeks to Ease Offshore Bank Compliance Rules

It began as a trickle last year. There was the odd announcement detailing cutbacks and job losses at companies like CSR and SPC before steelmaker BlueScope announced massive losses, the closure of a major section of its Port Kembla facility and 1000 retrenchments.

Less than six weeks into the new year and the drip, while not quite a deluge, certainly has become far more serious.

A host of corporations, all facing tough trading conditions, has been lining up to deliver the bad news. Manufacturers, led by each of the three auto-makers, have been labouring under the yoke of a record Australian dollar that has made them uncompetitive. The price of imported cars has dropped while export markets have dried up.

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As the political furore over emergency packages gathered heat, the smooth-talking head of GM Holden confided that governments around the world ''support'' their automobile industries. Without it, the message seemed, there would be no Australian auto industry.

Other industries, however, don't seem to engender the same kind of political support.

Aluminium maker Alcoa Australia this week confessed that it may have to close one of its two Victorian plants, at Point Henry, threatening the livelihoods of 600 workers. Again the company cited the strength of the currency along with the distressed state of the global aluminium market. The company is unable to compete.

In between, there has been a steady stream of dire warnings and pink slips from our financial institutions, capped off by a confession from Macquarie Group this week it had shed 1000 jobs in the past year with more to come.

While circumstances unique to each company often play a role in these decisions, it is clear that several forces have begun to take effect that will permanently reshape our economy and our roles within it.

The demise of our manufacturing industry is a familiar tale of steady decline, one that has been well-documented since the 1960s and a trend that now appears to be accelerating.

But it remains one of the nation's biggest employers of skilled and unskilled labour and each factory closure comes attached with an enormous degree of individual pain that has the potential to spill over into the political arena, something rarely mentioned in the economics textbooks.

It gradually is becoming clear just how painful the ''economic adjustment'' now under way within our economy could become. For while a stronger currency bequeaths greater wealth upon us all, through increased spending power, it's no real help if you're unemployed.

Up until around 2007, our economy was evolving in a fairly predictable and traditional manner. From Federation in 1901, rural employment gave way to a rise in manufacturing. And from the 1970s, as protection levels were reduced, manufacturing was overtaken by service industries.

In the mid-1990s, manufacturing was still the dominant contributor to the economy, accounting for 15 per cent of gross domestic product. But in the decade up until 2007, it declined to 12 per cent and it has been shrinking ever since as around 100,000 jobs have evaporated in the past three years.

Nevertheless, according to the latest statistics, just under 1 million Australians still are employed in the sector with the vast bulk in NSW and Victoria.

Those declines were largely offset by the growth in the services sector, which in the decade to 2007 grew from 10 per cent of our economy to 14.5 per cent.

A large proportion of those new service jobs sprang up in the business and property areas, more skilled and better paid. Australia was showing all the signs of a country that was growing up and an economy that was maturing.

The American experience was far different. Between 2001 and 2010, 42,000 factories closed and 5.5 million manufacturing jobs (about one-third of the total) disappeared. But the high-end jobs were not created to anywhere near the same extent.

There's no prizes for guessing where most of those jobs went. China, with its heavily manipulated and artificially depressed currency, now makes more cars than the US and Japan combined.

Those trends now are accelerating as Australia's transition to global quarry gathers pace. And it is no longer simply affecting our manufacturing. Increasingly, more complex service jobs are being sent offshore. That trend will gather pace within the next decade, driven by two fundamental forces.

The first is the changing nature of the developing economies themselves. As the middle class in China and India and other Asian nations swells, the number of highly trained graduates will grow exponentially. The offspring of factory workers, they will be no longer be content to work on car assembly lines and in clothing factories.

They will be providing information technology and business skills. And they will be available to sell those skills on an international market, thanks to the emergence of a second fundamental force - high-speed broadband.

Until now, India and the Philippines have been the major beneficiaries of the Australian trend to import business services, mostly through lowly-paid call centre work.

But once the National Broadband Network is constructed, the capacity for Australian business to import a vast array of skilled services from emerging Asian economies will be limited only by the imagination.

Already, this has begun to emerge.

Macquarie Group's chief financial officer, Greg Ward, this week outlined a trend that is bound to be replicated by others in the banking world.

In 2008, Macquarie had about 100 people working in ''low-cost jurisdictions'', offering support services in areas such as technology, human resources, finance and business services. Those numbers have swelled to 1000.

While some may argue Macquarie is an atypical example, given it has been under siege ever since the financial crisis first gripped global banking four years ago, it merely has been forced to look harder for greater savings. The others will follow.

Westpac's recent announcement that it would lay off 560 employees hinted that a large number of more highly-skilled jobs will be sent offshore. One pessimistic report last month suggested that up to 7000 workers in the financial services sector could find themselves out of a job within the next few years.

While the enormous capital influx into our resources sector has provided us with windfall gains and lifted our living standards, it also has the power to unleash powerful forces upon Australian society in the next few years.

Given it is a highly mechanised industry, not all those being laid off in manufacturing and services will be absorbed into this lucrative new growth sector. And therein lies a challenge for our politicians.

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Broadband to speed trend of sending service jobs offshore