From Michael Power’s Dot Indicia Blog:
http://michaelpower.ca/2013/04/fatca-revisited/
Hi Michael,
Have any of the “privacy experts” considered that every single brokerage firm already performs the same filter and requires the same determination for people who want to trade on US stock exchanges? All IIROC firms already have agreements with the IRS to share US Person determination in order to avoid US withholding taxes for all of their customers.
The privacy impact is true on US Persons, however that being said, these persons should either file their US taxes or relinquish citizenship, they have a choice! Tax treaties ensure relatively fair treatment.
Non-US persons in Canada will be slightly inconvenienced with being asked if they are truly non-US. Their information WILL BE PROTECTED and not sent to CRA (except for regular tax reporting).
It is absolutely astounding how quick groups like the green party are to complain that the top 1% don’t pay their share, however once a critical, world-wide tax evasion tool like FATCA comes in, they are quick to complain about privacy.
No countries in the world would be able to budge without the US moving first, so YEAH to the US for moving the bar and allowing everyone else to catch up. (Europe already moving to multilateral)
In the end, FATCA will likely make Canada more money then US by making snowbird report their foreign holdings honestly for fear of recipricol reporting coming in 2 years. Should we feel sorry for those tax evaders? I don’t, as they are getting their fair share of health care when nneeded, it is waiting for them!
I would encourage you to provide a more balanced set of positions on FATCA for your readers.
Remember — Tax evaded proceeds are criminal proceeds internationally! We have the same obligation in Canada to isolate and not shelter them as any other country does for us.
Privacy is not a shelter for illegal activity.
I suggest Brockers may want to make their way over to Michael Power blog and comment.
Thanks for posting this Tim. I expect “John” felt more than adequately challenged by the IBS SWAT team!
Troll!
The privacy impact is true on US Persons, however that being said, these persons should either file their US taxes or relinquish citizenship, they have a choice! Tax treaties ensure relatively fair treatment.
Actually @Jame, it is far more complex than that. First of all the tax treaty between Canada and the US does not cover some of our Canadian government promoted and registered means of saving for disability, education for our children, and other purposes. Our Canadian government registered accounts: the TFSA (tax free savings accounts), RDSP (registered disability savings plans), RESP (registered savings plans), and soon the PRPP (privated registered pension plan) are all deemed to be ‘foreign trusts’, which have punitive tax treatment by the US, complex and draconian reporting requirements and penalties, and are not tax exempt under the treaty. This means that we are unable to use the same government savings plans that our fellow Canadians are urged to use. This means that we cannot benefit by the government grants that accompany the RESP. We cannot save or invest the same as either our fellow Canadian citizens and residents, nor as the US citizen and US resident can do in the US.
The US refuses to automatically exempt our RRSPs and RRIFs, which are also Canadian government registered savings plans, and they are only exempt under the treaty using a special form and an annual election. If that is not done annually with our returns, then they are taxed by the US.
The US punishes the holding of Canadian mutual funds, and other investments.
The tax treaty does not exempt us from the new Obamacare tax on investments.
We are punished with the threat of confiscatory and unconstitutional fines if we do not report on the accounts of non-US citizens – whenever we have signatory or co-signatory powers – even contingent ones – of our non-US employers, voluntary organizations, business partners, and others – even when the accounts are not ours, we have no financial interest, and the accounts have no economic or any other connection with the US.
So don’t presume to tell us that ‘tax treaties ensure relatively fair treatment’. The treaty doesn’t cover many of our major legal ordinary sources of income and investment.
The US taxes our disability, our unemployment benefits, the sale of our Canadian primary residence, etc.
The US arrogantly asserts the right to tax our children – born outside the US as citizens of other countries – merely because of one US parent.
The US asserts the right to tax people who may never have set foot in the US, and who receive no US services, and have no right to vote in the US.
It asserts the right to tax and penalize ex-greencard holders with expired greencards living outside the US, who by virtue of having abandoned US residence, have no right to return or to live there, but are considered ‘US taxable persons’ until they formally surrender the card and prove 5 years US tax compliance.
The US is the only country other than Eritrea to tax people who have no economic connection or residence – but are merely citizens by birthplace or inherited via parentage.
The US has defined all our legal local banking and saving accounts as ‘foreign accounts’ – because they are outside the US, and subjects us all to the BSA as if we are criminals, and we must annually prove we are not via the FBAR. We are presumed guilty of money laundering and the like – and must prove the opposite. The pretext used by the US? Merely because our local banking is outside the US – which, surprise surprise, is because we live OUTSIDE the US. Our accounts are legal, and registered with our local tax authorities. Most of the contents are already post-tax wages. We are subject to the laws of the country where we live. We do not need the US to certify that our accounts are not criminal in nature or origin. No US resident is subjected to that kind of annual assumption of criminality without cause.
If you’ve looked into it, you know that the US asserts that we must have been 5 years tax and reporting compliant in order to renounce. You must also know that we are charged 450. for what is our human right – to renounce unwanted US status.
We receive nothing from the US, and want nothing from the US. Many of us were born citizens of other countries and have never been to the US. Many naturalized outside the US decades ago. Many were told that they lost US citizenship automatically when they did so. Some were born to non-US parents on short term study or work in the US. Others were born in US border hospitals when their mothers were sent to the US to give birth, from Canadian border communities.
We have one major thing in common – we receive absolutely no services or other benefits from the US of Arrogance. We pay our taxes in full where we live and work – outside the US, and the US demands that we must owe it reporting and taxes notwithstanding the first set we pay where we actually live.
We’ve done our research – and have detailed extensive solid research on which to back up our position.
Have you?
@Jame,
If the reality was as simple as you imply, then this website would never have come into existence.
@Badger,
Thanks for trying to explain some of the complexity to Jame.
@WhiteKat, it is astounding how often we have to hear about that ‘fairness’ that the treaties are supposedly providing. No one knows about the FBAR and other reporting, or the growing amount of situations in which the treaty does not help to stave off the arrogant predations of the US.
Our home country government does not want to admit that it negotiated treaty terms that still puts us at significant risk, and the US does not admit that it intends to have its way and tax and penalize us despite the treaties, and continues to deem everything taxable until it decides it isn’t – only under pressure.