2. Canada will execute an intergovernmental agreement with the U.S. to administer the U.S.’s Foreign Account Tax Compliance Act (“FATCA”)
In Canada, there have been a lot of complaints and open musings about whether or not Canada should or can comply (privacy and constitutional issues). However, let’s not kid each other, Canada will comply with FATCA. The Department of Finance is currently negotiating an intergovernmental agreement with the U.S. regarding how Canada will comply with FATCA. Expect such agreement to be completed soon with implementing legislation to be introduced to Parliament shortly thereafter.Regardless of what you think about FATCA, all right-minded people will agree on two things: First, Canada must implement an intergovernmental agreement with the U.S. because without doing so Canadian banks and other businesses will be placed in the unenviable position of being forced to deal directly with the IRS on its implementation.
Second, Canada can’t afford to be exempted from FATCA’s reach. One of the purposes of FATCA is to force transparency in the banking system and, ostensibly, catch bad actors. If the U.S. were to exempt Canada from FATCA (which it would never do) all the bad actors FATCA was designed to catch would flock to Canadian banks and businesses. …
Read the rest at: Tax predictions for 2014, by Kim Moody
I think @vote in2014 is not even aware of what this blog is all about. He is just googling for organizations and blogs that are overseas. He is just checking off a list. I would be surprised if we hear from him again. Your reply was so nice and polite.
RE: Voting in US elections
I would caution anyone who might at this moment qualify for a back-dated CLN (i.e. hold a long term non-US citizenship with no connection to the USA including not voting in US elections, not having a US passport, not filing US taxes) to PLEASE DO NOT VOTE. You would be walking into the aha-gotcha trap — proving you actually did intend to retain your US citizenship.
@Not that Tara
The head of the Swiss-US Chamber of Commerce is really trying his hardest to gloss things over, isn’t he? The general gist of what he says, imo, is that everything will be great between Switzerland and the US as long as the Swiss don’t complain too much about how the US is treating Switzerland. Under it all he sounds pretty worried, although using the term ‘screaming’ would lead you to believe that he thinks it’s just histrionics.
As a matter of fact, I think Swiss people should scream LOUDER, so the world can sing in perfect harmony against what the US is doing.
I’m not voting for anyone who doesn’t take an official stand against FATCA and CBT.
@ vote in 2014. Yup, too late for me as well. This latest onslaught of stupidity from the US government has caused me to finally bail on my US citizenship. The US will have to fix it’s own problems.
@ Blaze. I agree with you re: Carl Levin (or is that Lenin?) He is quite chilling and frightening. He gives Schumer a good run for his money. Fortunately for us he’s also stupid. He slipped FATCA into the back end of the 2010 HIRE act as a means of paying for all the new handouts. Something about any new spending has to include provisions for new revenue to pay for it. They never had any serious discussion about whether it would actually produce revenue, how to pay for it, or how to implement it. They left that to the IRS which can’t even ride herd on it’s own domestic taxpayers.
The thing is, FATCA depends on unwilling participants all around the world to actually implement. I don’t think any bank or foreign government is going to try too hard to gather information that will only benefit the US government. Even those countries who are licking their chops thinking about all the reciprocal data they have been promised in their IGA will lose their enthusiasm once they discover they’ve been swindled. And once they figure out it’s a one way street with the US stealing from their treasuries, raiding their tax bases and letting their banks bear all the costs they will really lose interest. Any contract that depends on one party intimidating and coercing the other is doomed to fail. And with no effort to attempt to dismantle or even lift the veil on the US’s own tax havens, other countries will eventually say to heck with FATCA; there’s nothing in it for us.
So yes, it is about control, and the other countries of the world will get it eventually. I believe China and Russia already understand what’s at stake and won’t sign on. I also believe that’s why Canada hasn’t signed up yet; there is absolutely no benefit to Canada. We have to remember that CBT is an outlier; without CBT FATCA wouldn’t be necessary. So is the rest of the world really going to assist the US in attempting to maintain what is an aberration?
@Vote in 2014,
I am a US citizen who will vote in the next election—but I have a suggestion for you as a teacher who has no choice but to provide “balanced” information to your students so that they can make rational decisions about their lives:
Perhaps you could consider a class project in which you turn the students loose on this Brock website (and links) and then ask them to respond to something like this open-ended question: “Should US citizens abroad vote or renounce?”
If you do take this on, could you please post the outcome?
Thanks for the link… Did you also see this interview at SwissInfo..?
I think it is time for a MASSIVE protest outside Jim Flaherty’s office. We’ve all waited patiently and I have a gut feeling he is being forced to change his tune. This needs attention NOW as it is still a secret to most all Canadians and duals. I will not give up on this fight and I know people are coming out of the “fear” shell and wanting to stand up. You want TV cameras and radio journalists? Huge protest…. needed now…
http://www.cuna.org/Stay-Informed/News-Now/Washington/Call-for-FATCA-Repeal-Could-Gain-Momentum/ Here’s the scoop on where Credit unions stand………………The World Council of Credit Unions supports the adoption of the draft RNC resolution. “We share the concern that FATCA, if left in place, will impose billions of dollars of compliance costs on credit unions and other financial institutions annually,” said World Council President/CEO Brian Branch.
Well, if an IGA is to be signed by Canada, I think it should include a clause that says we (Canada) can withhold a 30% “tax” on all of Bill Gates holdings in CN Rail, 30% on all of Carl Icahn’s holdings in Talisman Energy, maybe 30% on all of Fidelity Investments “Canada” Fund….etc….etc and use these funds to reimburse any Canadian citizen being fleeced by the USA. It’s REALLY time to play hardball with these bullies!!! Once the rich guys who really control the USA are hit, we’ll get a world of publicity. Do we need US investment….YES, but I’ll bet you the Chinese and Russians can very easily make up the difference, thereby even accelerating the pending irrelevance of the USA in world economics. Go for it, Flaherty!
Pingback: Kim Moody and Roy Berg say Canada MUST Comply with FATCA | Investors Europe Interns
What a ridiculous and baseless claim:
“………If the U.S. were to exempt Canada from FATCA (which it would never do) all the bad actors FATCA was designed to catch would flock to Canadian banks and businesses. “…
For the US to force an extraterritorial law on Canada, with all the attendant costs of implementation – to be paid by ALL Canadian taxpayers and accountholders for no return, and no benefit to Canada – that is the true crime. The threat to Canadian banks and to Canada from the US is extortionate.
And, I thought that the US was ALREADY claiming that Canada (and every single other country) was ALREADY full of a million or more ‘bad actors’ – all the snowbirds with substantial presence, Canadian dual citizens, and US persons who already live abroad as permanent residents in Canada, and all those living, born or naturalized as duals in Canada (and elsewhere) for the express purpose of “not paying their fair share” of US taxes? As well as every single one of that >1 million having one or more ‘foreign (non-US)’ accounts in Canada? Many of which are not even taxable, and all of which are already transparent, and overseen by layers of domestic oversight? Plus all the other accounts that FBARs are demanded for that don’t even have a US owner or any US economic or other connection (ex. Canadian employers, estates, charitable and voluntary organizations, churches, etc.).
FATCA and FBAR cannot stop us from having ‘foreign’ non-US accounts at Canadian banks, insurance companies and pension plans, because we live in and most are citizens of CANADA. So where is all the alleged ‘flocking’ supposed to come from?
I fail to see how this kind of exaggerated repetition of baseless US claims have any useful place on a professional website in Canada. There is a serious conflict of interest there. Witness also the rapid expansion of their practice, and the rapid upwards movement of their fees.
….. and apparently, according to Moody, we aren’t “right-minded people” because we don’t agree that Canada should sign a FATCA IGA.
He says; …”Regardless of what you think about FATCA, all right-minded people will agree on two things: First, Canada must implement an intergovernmental agreement with the U.S. because without doing so Canadian banks and other businesses will be placed in the unenviable position of being forced to deal directly with the IRS on its implementation…”….
Yeah, so just throw all Canadians to the wolves, and reap huge fees from the others, to save Canadian banks and other businesses.
So, why is it that the Canadian bankers fought so hard to the end against the Volcker Rule http://business.financialpost.com/2013/12/10/volcker-rule-canada-banks/ on behalf of their operations inside the US, but not against FATCA which has a Canadian domestic impact on over a million Canadian families?
@Vote, goodness! I tried that for two years and got called a “Myth” for my efforts. The U.S. simply does not care about us at all.
Many cannot comply with this and they do not care one bit. It is costing some their citizenship! I WAS voting, writing reps, calling offices for two years solid. No response. We do not have any representation as it is so diluted as to be useless. Congress critters do not care about Americans abroad.
Due to its proximity to the US and the many Canadians who have some sort of tie to US nationality, Canada is probably already the WORLD LEADER in so-called “undeclared foreign accounts” by so-called “US persons”.
Assume conservatively that 500,000 Canadian residents fit FATCA’s broad definition of so-called “US person”. Assume that at least 70% of them have some kind of banking or investment account. That’s 350,000 accounts.
Reality: Canadian banks and financial institutions and insurers are probably harboring at least 1/2 million accounts that meet FATCA reporting criteria. And the vast majority of these are probably held by resident Canadian citizens, and contain Canadian-originated earnings.
So far, only CRA policy wonks, a handful of Federal politicians, banking compliance staff, cross boarder legal specialists and a very small percentage of everyday Canadians know about FATCA.
Implementation is where “the rubber meets the road”. What happens when highly the complex “rubber” of FATCA compliance hits the hard cold “road” of offensively disrupting the financial affairs of law abiding Canadians on a highly personalized basis – due to their national origin or place of birth?
Canada will be the battleground state for FATCA due to the combination of the large numbers of Canadians affected and its strong tradition of human rights and judicial activism. Small wonder the banks and government have been trying to keep this issue under wraps.
Good perspective on the situation. The last image a bank wants is that it’s not a safe place to keep money!
That is, ANYBODY’S money. Yours or your neighbours.
Yes Canada just might be the battleground for the FATCA roll-out. When the US’s closest neighbor with an intertwined economy and population can’t be persuaded to sign an IGA right from the get-go, they’ve got a major problem. There is nothing in the existing tax treaty relationship between the two countries that needs changing. This must be an embarrassment for the US on the world stage. If Canada were enthusiastic about this we would have been the first on-board. We’d be standing here shouting to the world, “come on in folks, the water’s fine”.
When you consider that FATCA depends on unwilling account holders being coerced to allow unwilling financial institutions to hand over information to an unwilling CRA to send off to an incompetent foreign government agency one can only imagine the train wreck that will ensue. Every individual and organization along the way will do their level best to slow down, obfuscate, confuse and derail the whole process. One can only imagine the hodge-podge of incomplete, erroneous data that will result, if they get anything at all.
The image in my mind is that of POWs in a forced labour camp making sure they worked as slowly as possible to build things that would either not work, collapse, or wash away in the first rain storm.
So the deafening silence coming out of Ottawa I take as a good sign. Our government can’t publicly state that they think the whole thing is an abomination, but they can bog the whole thing down in endless bureaucratic negotiation, red tape and fine print, all the while hoping that the US will eventually come to it’s senses before the inevitable disaster and irrevocable damage to international relations occurs.
Very good points. Bureaucracy is very easy to bog down. And Yes, if FATCA was really good we would have seen Ottawa say yes right away.
UK said yes right away and they also said yes to W to invading Iraq. So there is UK’s wise choices, eh?
Canada has a history of occasionally telling the US to f—off. 1812, Vietnam, Iraq; it’s a short but significant list. My favorite is the building of the Kettle Valley Railway about a hundred years ago to fend off the onslaught of Americans flooding North of the border to rip-off Canada’s natural resources.
Let’s hope that FATCA will be another chapter in Canada’s willingness to tell the colossus to the South to back off when it gets too greedy.
We can only hope that the present day politicians and influential leaders have the same vision of Canadian sovereignty as those railway builders of a century ago. Harper apparently is a keen student of Canadian political history and is surely aware of the political value of not being seen to being overly friendly with the US.
@northern star….”UK said yes right away”….. yes and it will cost ££ billions to implement to catch the estimated 250K USPs in UK…although I have a sneaking feeling that number will start to decrease fast in coming years.
@pozycjonowanie łódź -other sites you might find interesting and useful re: your 2nd question
repealfatca.com [authored by james Jatras]
also you can find the [very] occasional good Anti-FATCA article on “centre for freedom and prosperity”
hope the above proves useful
Mr (or ms) łódź is a spammer. Over time you come to recognize the signs; irrelevant and/or generic content (“my friend makes $100/hr working from home!”) and an unfamiliar username that links to some other (possibly malicious) web site.