From March, Mexico plans to deliver data to the United States on all Americans with investments in Mexican banks of more than US$50,000.
As part of the implementation of the Foreign Account Tax Compliance Act (FATCA), the Internal Revenue Service (IRS) will also be exchanging information with the Tax Administration Service (SAT) of Mexico on Mexican nationals with bank accounts or investments in the United States.
The US$50,000 threshold for financial assets varies for unmarried and married citizens. Critics have argued that the threshold is too low, and will hit expats who have spent years saving so they could enjoy their retirement abroad.
Mexico’s bilateral agreement to cooperate with FACTA was finalized on April 9, 2014. Since then, hundreds of banks have agreed to participate. Financial institutions that refuse to comply with the legislation may face severe penalties, including a 30 percent tax on their assets in the United States.
Opponents of FATCA argue that it is forcing citizens to renounce their citizenship at unprecedented rates. In 2015, 4,279 citizens gave up their passports, compared with 742 in 2009, before FATCA. U.S. lawmakers have estimated that the United States loses US$100 billion in tax revenue not collected on foreign accounts.