Financial Translations of Foreign Investment Documents
We’ve blogged about the need for professional legal and financial translation services to translate multilingual documents pertaining to global pension funds. A few days ago the US House of Representatives Ways and Means Committee held a hearing on possible modifications to tax-favored retirement savings plans, including employer-sponsored defined IRAs, which could be considered as part of comprehensive tax reform. Traditionally, IRAs receive favorable tax treatment. However, according to the Committee, this equates to over 200 billion dollars in lost federal revenue per year. Needless to say, the government is looking at changing the IRA’s status in order to recover some of this revenue.
The issue seems to stem from the fact that there is currently a proliferation of tax-favored retirement accounts, causing some to question whether the large number of plans with different rules and eligibility criteria leads to confusion, reducing the effectiveness of the incentives in increasing retirement savings.
One concern though is that if the tax favored status of IRAs is changed in any way, many people will turn to international tax sheltering and saving options. That trend will likely costs the government more in revenue – both in lost revenue and in revenue used for monitoring foreign investment accounts. At the same time, the individual will lose due to the costs of setting up a foreign savings or investment account, which will require such additional costs, such as foreign language translations.