Belgium defends tax data sharing with US
In Belgium, a notable clash between the government and its data protection agency has emerged over the exchange of financial information with the United States. The Belgian Data Protection Authority has deemed the transfer of financial data of Americans in Belgium to the U.S. Internal Revenue Service as a violation of EU data privacy laws. This dispute highlights the ongoing struggle of “accidental Americans” – individuals with U.S. citizenship but little to no ties to the country – who are seeking to limit the reach of U.S. tax laws into their lives.
The controversy stems from the Foreign Account Tax Compliance Act (FATCA), a U.S. law that mandates global financial institutions to disclose the account details of American citizens to the IRS to prevent tax evasion. Belgium, along with over 100 other countries, has agreed to this information exchange. However, the Belgian privacy watchdog has ruled that this bulk data transfer does not comply with the EU’s General Data Protection Regulation (GDPR), which has stringent requirements for personal data protection.
The debate has intensified with the Belgian government’s appeal against the data authority’s decision, arguing that their bilateral agreement with the U.S. predates GDPR and is therefore valid. Yet, the data authority insists that international agreements cannot indefinitely contravene GDPR standards, setting the stage for a legal showdown.
The personal impact of this legal battle is felt by individuals like Thomas Lambert, a Belgian citizen with accidental American status due to being born in Texas to a Belgian Air Force officer stationed there. Lambert, who left the U.S. as a child and has no connection to the country, faced hurdles in his financial dealings in Europe because of his American citizenship. With the recent reduction of the U.S. denaturalization fee from $2,350 to approximately €450, he now sees a glimmer of hope in resolving his citizenship dilemma and freeing himself from the bureaucratic entanglement.
