According to their website, “The Canadian Bankers Association works on behalf of 54 domestic banks, foreign bank subsidiaries and foreign bank branches operating in Canada…to promote an understanding of the banking industry and its importance to Canadians.”
It is all the more disappointing to find the following information on their site, intended for us Canadian consumers (says last updated July 5).
- For a US person – “If you do not complete IRS Form W-9 or provide your consent to disclose information to the IRS, your financial institution may be required to withhold a tax of 30% on any U.S. source payments that you receive and send this money to the IRS. Also, your financial institution may refuse to open an account or may be required to close existing accounts” (emphasis mine).
- For ‘non-US person’ clients, the repercussions of not providing further documentation, if requested, are, “If you choose not to provide this additional documentation upon request, at a minimum, your financial institution may be required to withhold a tax of 30% on U.S. source payments1that you receive and send this money to the IRS.”
So, a Canadian born in Scotland that has US indicia who refuses to provide documentation will have 30% US source income withheld. A Canadian born in the US who refuses to provide documentation will not only have 30% withheld, but may have their account closed? Yet, if both refuse to provide further documentation, then how the heck will a bank know where a person was born? And how is this not discrimination?
Shouldn’t this banking association be the ones reassuring us that Canada’s Access to Basic Banking Services will come into play for our protection?
Obviously not. Seems like they are quite willing to roll over and expose their tummy.
If the CBA is on board with FATCA, then it seems that the individual banks will just follow their lead. My impression is that the CBA is simply telling US born Canadians “yep, sucks to be you”.
The CBA’s stance seems to be that the banking industry is important to Canadians but not all Canadians are important to the banking industry.
Frustrating, disappointing and upsetting, but I guess not unexpected given what’s been happening in the last couple of months.