CBC World at Six January 28, 2014, Starts @ 10:00 James Fitz-Morris: FATCA
NOTE: Looks like the link above refreshes to new date’s broadcast each day. I cannot find an archived link for CBC, The World at Six for January 28, 2014.
Government of Canada seeking RECIPROCITY … one of the biggest sticking points in the negotiations as the U.S. WON’T LET OTHER COUNTRIES’ LAWS TO BE ENFORCED ON ITS TERRITORY!
At least the US has some conception of their own national sovereignty. Why doesn’t Canada have the same? Or at least our current government?
Emphasis is off US persons living in Canada right now, but apparently Canada would feel better about turning over US citizens here if the US would turn ours over there. Did anyone else detect a pro-IGA tone at all?
I heard the story and was puzzled. It was a very short story, without much detail. Doesn’t Canada already get information about US accounts of Canadian residents, and why would they care about Canadian citizens resident in the US. I just wonder if some reporter got a bit confused about the issues (easy to do) I’m not going to take it seriously unless I hear more details that makes more sense.
Until the media starts to understand and explain RBT vs CBT reciprocity will remain a red herring. Exactly what new information would Canada receive under FATCA that it doesn’t already have? The answer: diddly squat. Same thing goes for every nation on earth.
On the next episode of The Education of James Fitz-Morris: There is no such thing as FATCA reciprocity and there never will be.
I’ve sent James Fitz-Morris an email with the link to comments here, including from George III on another thread:
Judge Rules U.S. Banks Must Report to Foreign Countries under FATCA Deals #DATCA
A federal court has ruled that U.S. banks must report to foreign governments on the holdings of nonresident alien account holders under the intergovernmental agreements that the Treasury Department has signed with other countries’ tax authorities in an effort to implement the Foreign Account Tax Compliance Act.
http://isaacbrocksociety.ca/2014/01/16/judge-rules-u-s-banks-must-report-to-foreign-countries-under-fatca-deals/
Where is the CBC getting their info?
What is a “nonresident alien account holder”? Would that be a Canadian living in Canada who has a US bank account? A French citizen living in France with a US bank account? etc. etc.
If that is the case, then that US court ruling is not referring to a Canadian or French citizen living in the USA with a US bank account. I think the lack of reciprocity the CBC reporter mentioned was that the US will not share bank account data on US residents to foreign countries. Anyone who knows US banking privacy laws please correct me if I have anything wrong here.
Here’s an optimistic view: maybe, just maybe, Jim Flaherty knows that the US cannot meet demands for true FATCA-like reciprocity (if it’s against their laws) and that by making this a sticking point is his way of stalling or killing the deal. He has also said in the past that he doesn’t want Can/Am dual citizens to be “disadvantaged” (whatever that means!).
That CBC news report also had an encouraging blip about the Privacy Commissioner talking about taking the banks to federal court if they break our privacy laws by sending account info. to the IRS. Nice to hear that!
Comments on this in another thread start here: http://isaacbrocksociety.ca/2014/01/28/is-ottawa-stalling-on-fatca-tax-crackdown-because-u-s-isnt-ready/comment-page-1/#comment-1045560 .
As I wrote in the other thread:
Canada should hold out for strict reciprocity, and only agree to send the US information on the interest earned in Canadian accounts by RESIDENTS OF THE US. This would effectively change FATCA reporting in Canada to a residence-based system, rather than a citizenship-based one.
It also would ripple around the world to other countries with IGAs, all of which state that that country gets the benefit of any better terms given to any other country.
foo, so Americans in Canada who are not duals and not permanent residents would have their interest reported? Doesn’t that already occur under the current tax treaty? I think it does. The CRA reports interest and tax info to the US on any of their citizens in Canada. And that, in the USG’s eyes is the problem. It’s not identifying type of account, account numbers or where these accounts are held. THAT is what FATCA is really about. It’s about data-mining. The USG is a data whore, generally speaking, and a control freak data whore where its serfs are concerned. All its serfs. Even those who have left the plantation.
Thanks, foo.
Based on the seemingly apparent lack of understanding by all countries of the emptiness of promise of U.S. reciprocity, I will compose another letter to my Canadian government representatives tomorrow morning. Wouldn’t it be a turning point if your common sense suggestion for hold-out for reciprocity, only agreeing to send the U.S. information on the interest earned in Canadian accounts (and account information) by RESIDENTS of the U.S.? All previously signed IGA’s would have their countries’ terms changed. I will dream of that tonight.
In my recent email to Jim Flaherty I repeated Peter Hogg’s suggestion that Canadian banks only report accounts of US residents, not US citizens living in Canada. I encourage everyone to repeat this message to their MP, Flaherty & Harper.
It has been the rule for years that Canada has only ever reported the bank account information of U.S. residents who have Canadian bank accounts.
What a two faced attitude. Canada should take the U.S. to the International Court. Although the U.S. won’t recognize the Court’s authority the fact is that the publicity will be enough to throw the covers off U.S. hypocrisy. Canada could also take steps under NAFTA, and the WTO. I am sure that there are other trade agreements that could also serve as a forum for fighting this law.
The last thing that a bully ever expects is a fight. Therefore that is the best way to defeat the bully.
@calgary…..this is why one Caribbean country whose top leader I know personally has said, through a family member, that the US is a tyrant and hypocrite and that “our country gets NOTHING in return”
Look for a rebellion among the Island countries after they are finished yelling at that IDIOT Wayne Panton for trying to lead them off a financial cliff http://www.caymanfinance.gov.ky/portal/page?_pageid=4081,7692739&_dad=portal&_schema=PORTAL
We at IBS should be lobbying the countries that signed their “IGA”s to admit they made a mistake and back out of the agreements
@Chears,
Reading the link, showing the apparent sucking up in pleasure of signing the agreement, is nauseating.
Good morning Canada!!
I woke early today to see this good news over at IBS. Corn flakes (Corn from Canada, processed in Poland), orange juice (from Spain not Florida) and IBS (Canadian Domain) is a great way to start the morning. (Rather depressed yesterday with my posting though).
Growing up, I spent a lot of time north of the border and as a teen then as a young adult kept trying to figure out how could I just move permanently north. Well that did not happen and I instead received the close second on the list of dreams here in the EU.
But to this day, I am often asked if I am Canadian to which I simply smile being a proud Mistaken Canadian. Sadly you all can be mistaken for only one thing.
I am reminded of the phrase that a chain is only as strong as its weakest link and from this side of the atlantic. Just maybe you have been given a glimpse of that weak link in the minds of your government with Fatca.
Reciprocity, Reciprocity, Reciprocity go for it.
You have a chance to tell your MPs how to say NO. Maybe just maybe they want to say NO deep down but they have not formulated a way to say NO and keep face with their southern masters.
Here is what I was thinking along the lines of.
1.) Canadian Banks should suffer the same penalty structure that US banks would suffer, the diminimis $100 fine, not the 30% withholding on all the banks US income. Or better yet, US banks should suffer 30% withholding on Canadian source income. Good for the goose, good for the gander.
2.) Canada should demand in depth reporting on all Canadian Persons and Citizens with accounts in the US subject to penalty. Absent that in the view of reciprocity, Canadian Banks should only be reporting on accounts held by homelanders. Canada should ask for this now while they have leverage in case they decide to tax Canadians in the US. If they do not get this now, they will never get it later if and when they need it.
The more I think about this, the US would be absolutely screwed if Countries around the world as a means for reciprocity taxed their worldwide citizens in countries which taxed their taxed worldwide citizens. Meaning all ex-pat _______, living in the USA and Eriteria would be taxed by their respective homelands. “Recipricol Citizenship Based Taxation (RCBT).” Maybe that should also be suggested, not that your government would do it but it is a way to bring attention to the masses. Why does the US get to tax US persons in Canada AND Canadian Persons in the USA? They are getting twice as much and Canada gets the big fat ZERO. Besides we know that the US is a tax haven with tax shelters and lower tax rates, Canada is none of these things.
3.) If Parliament is going to ratify this into law, the agreement should require the US Senate to ratify it so Canada can be ensured it will not be subject to legal challenge in the US.
Essentially Canada should ensure and insist on “mirror reciprocity.”
Remember that “reciprocity” is simply a nicer word for “retaliatory.”
Consider using the reciprocity as used in the EU as an example. Each country guarantees reciprocity in the other countries.
US States often have reciprocity agreements. Concealed carry laws in one state allow reciprocity in another if it also allows reciprocity. Same with many professional licenses. Even the US Constitution guarantees reciprocity on many matters between the states.
Remember, these are mainly “men” doing the negotiations. Go for the alpha instinct in them. If they come back with a one sided agreement, you will remember that.
Personally, I do not like any of the outcomes in the above but if it is one of many paths to fight then take them!
The best path however, is that most of you are Canadian living in Canada! The only thing Duel about you is that in law you are a duel citizen that being Canada/Commonwealth. May I suggest that you also point that one out. The law in Canada to the best of my knowledge makes no reference to which means there is no recognition of Duel Citizenship. But the Laws of Canada recognize one kind of duel citizenship and that is you are citizens of Canada and citizens of the Commonwealth!!
We need to get rid of these cultural phrase of dual citizenship because it makes us look “special” amongst those that do not have it. Its hurting not helping us.
God Save the Queen (of Canada)
Well, well. “the US will not let other countries’ laws be enforced on US soil”, eh????? Very interesting!
We already know that the US reports the bank accounts of CANADIAN RESIDENTS to the CRA by way of our Bilateral Tax Treaty. Does anyone think Canada is holding out for information on Canadians who are RESIDENT in the US???
@Marie
Now that would be a waste of Canadian taxpayers money, wouldn’t it? I’m not so concerned about ambiguous or misinformation given by the press, because other than the slim chance the CBC will be completely discredited by it, any further scrutiny shines a brighter light on the truth – and the truth about FATCA and CBT is not in any way GOOD.
@Bubblebustin
I hope what James Fitz-Morris and the CBC reported is absolutely true. The US will never give FULL reciprocity.
We keep thinking of Canadians resident in the US as having cut all ties with Canada, and therefore not taxable. This may not true. I’m sure that there are thousands of dual residents, people engaged in cross border businesses, etc. that would be considered residents of both countries. Maybe Canada is seeking info on those Canadians. Under the bilateral tax treaty, their financial information may not get forwarded to Canada since the US considers them residents/citizens.
Yes, hence the need for more information sharing at our border.
I have listened to the CBC report a couple of times. It is presented as if it were breaking news, but there is little evidence that this is the case.
This morning (Jan 29) I checked the Globe & Mail and Ottawa Citizen (print versions) and the National Post (online). None of them reported on FATCA today.
@Bubblebustin
The US can barely get the reporting of non-resident data through Congress. If Canada demands true reciprocity, that could be a deal breaker. Other countries will demand the same. The US will never share private data on US residents with foreign nations. Maybe i’m reading too much into it. I can’t remember who said it. I think it might have been Jim Jatras at the fatca forum, reciprocity could bring FATCA to a halt.
@Marie
An enhanced information exchange at the border will quickly determine which country a traveler is a legal resident of – in spite of what they declare on paper, wouldn’t it? Permanent residents in Canada will see their status revoked, and citizens claiming to be resident in Canada will be subjected to Canada’s departure tax. You’re right, full reciprocity would allow Canada a complete picture of both its resident’s and non-resident’s banking affairs in the US, but how would this add to Canada’s tax base? I guess the gazillion dollar question is whether Canada is really insisting on full reciprocity, as alluded to by James Fitz-Morris.
I am troubled more by the position apparently taken by the Canadian government:
My read of the Fitz-Morris statements is that, unfortunately, Canada WILL sign the IGA IF there is reciprocity.