I received a W8BEN IRS tax form today from a non U.S. bank asking me a non U.S. person to sign under penalties of perjury that I’m not a U.S. person, the bank says this is how they are required to prove non U.S. personhood as they already have a certified copy of my CLN.
@All
47 pages to say YES Canada will kiss your ass. You can your slaves information.
Does this part mean it’s just going to be attached to the Treaty and that Parliament won’t have to vote on it?
The Competent Authorities of Canada and the United States shall enter into an agreement
or arrangement under the mutual agreement procedure provided for in Article XXVI of
the Convention, which shall:
a) establish the procedures for the automatic exchange obligations described in
Article 2 of this Agreement;
b) prescribe rules and procedures as may be necessary to implement Article 5 of this
Agreement; and
c) establish as necessary procedures for the exchange of the info
@all.. I will still vote..It will be for an independant new party. want to start one?
And as expected, the escape clause………….
Article 6
Mutual Commitment to Continue to Enhance the Effectiveness of Information Exchange
and Transparency
1. Reciprocity. The Government of the United States acknowledges the need to achieve
equivalent levels of reciprocal automatic information exchange with Canada. The
Government of the United States is committed to further improve transparency and
enhance the exchange relationship with Canada by pursuing the adoption of regulations
and advocating and supporting relevant legislation to achieve such equivalent levels of
reciprocal automatic information exchange
Well I’m pretty much speechless….
@Trishia,
you many need something but you don’t always get it.. Canada don’t hold your breathe.
@Stateless Man
That is ridculous. Is this where the refusals begin?
4. Notwithstanding a finding of U.S. indicia under subparagraph B(1) of this
section, a Reporting Canadian Financial Institution is not required to treat
an account as a U.S. Reportable Account if:
a) Where the Account Holder information unambiguously indicates a
U.S. place of birth, the Reporting Canadian Financial Institution
obtains, or has previously reviewed and maintains a record of:
(1) A self-certification that the Account Holder is neither a
U.S. citizen nor a U.S. resident for tax purposes (which
may be on an IRS Form W-8 or other similar agreed form);
(2) A non-U.S. passport or other government-issued
identification evidencing the Account Holder’s citizenship
or nationality in a country other than the United States; and
(3) A copy of the Account Holder’s Certificate of Loss of
Nationality of the United States or a reasonable explanation
of:
(a) The reason the Account Holder does not have such a
certificate despite relinquishing U.S. citizenship; or
(b) The reason the Account Holder did not obtain U.S.
citizenship at birth
Page 22 of 47
Page 46 of 47
IV. Accounts Excluded from Financial Accounts
The following accounts and products established in Canada and maintained by a
Canadian Financial Institution shall be treated as excluded from the definition of
Financial Accounts, and therefore shall not be treated as U.S. Reportable Accounts under
the Agreement:
A. Registered Retirement Savings Plans (RRSPs) – as defined in subsection 146(1)
of the Income Tax Act.
B. Registered Retirement Income Funds (RRIFs) – as defined in subsection 146.3(1)
of the Income Tax Act.
C. Pooled Registered Pension Plans (PRPPs) – as defined in subsection 147.5(1) of
the Income Tax Act.
D. Registered Pension Plans (RPPs) – as defined in subsection 248(1) of the Income
Tax Act.
E. Tax-Free Savings Accounts (TFSAs) – as defined in subsection 146.2(1) of the
Income Tax Act.
F. Registered Disability Savings Plans (RDSPs) – as defined in subsection 146.4(1)
of the Income Tax Act.
G. Registered Education Savings Plans (RESPs) – as defined in subsection 146.1(1)
of the Income Tax Act.
H. Deferred Profit Sharing Plans (DPSPs) – as defined in subsection 147(1) of the
Income Tax Act.
I. AgriInvest accounts – as defined under “NISA Fund No. 2” and “net income
stabilization account” in subsection 248(1) of the Income Tax Act including
Quebec’s Agri-Quebec program as prescribed in section 5503 of the Income Tax
Regulations.
J. Eligible Funeral Arrangements – as defined under subsection 148.1 of the Income
Tax Act.
K. Escrow Accounts. An account maintained in Canada established in connection
with any of the following:
1. A court order or judgment.
2. A sale, exchange, or lease of real or immovable property or of personal or
movable property, provided that the account satisfies the following
requirements:
a. The account is funded solely with a down payment, earnest money,
deposit in an amount appropriate to secure an obligation directly
related to the transaction, or a similar payment, or is funded with a
financial asset that is deposited in the account in connection with
the sale, exchange, or lease of the property;
b. The account is established and used solely to secure the obligation
of the purchaser to pay the purchase price for the property, the
seller to pay any contingent liability, or the lessor or lessee to pay
for any damages relating to the leased property as agreed under the
lease;
c. The assets of the account, including the income earned thereon,
will be paid or otherwise distributed for the benefit of the
purchaser, seller, lessor, or lessee (including to satisfy such
person’s obligation) when the property is sold, exchanged, or
surrendered, or the lease terminates;
d. The account is not a margin or similar account established in
connection with a sale or exchange of a financial ass
@Trishia I’m guessing this is just the easiest way for the Banks to have a uniform way of proving non U.S. personhood, I would guess we will see major Canadian bank incorporate the same policy.
I don’t know if the Banks send in this document to the IRS (I’m waiting for an answer) or just keep it on record as proof they are in compliance when they need to prove it.
The “good news”
Page 7
7. All information exchanged shall be subject to the confidentiality and other protections provided for in the Convention, including the provisions limiting the use of the information exchanged.
Page 15
a) Canada shall not be obligated to obtain and exchange information with respect to a calendar year that is prior to the calendar year with respect to which similar information is required to be reported to the IRS by participating FFIs pursuant to relevant U.S. Treasury Regulations;
b) Canada shall not be obligated to begin exchanging information prior to the date by which participating FFIs are required to report similar information to the IRS under relevant U.S. Treasury Regulations;
Page 16
1. Reciprocity. The Government of the United States acknowledges the need to achieve equivalent levels of reciprocal automatic information exchange with Canada. The Government of the United States is committed to further improve transparency and enhance the exchange relationship with Canada by pursuing the adoption of regulations and advocating and supporting relevant legislation to achieve such equivalent levels of reciprocal automatic information exchange.
Page 22, This is important because it uses the word RELINQUISH and not RENOUNCE. Someone on the Canada side knew what they were doing on this point. Other countries IGA need to get most favorable provision on this one.
(a) The reason the Account Holder does not have such a certificate despite relinquishing U.S. citizenship; or
Page 39 are the exempt accounts…Page 45…nice they included escrow accounts.
“No U.S. taxes or penalites are to be applied to U.S. citizens, or dual citizens, with bank accounts in Canada, the officials added.”
I don’t get it. There just going to collect the information but now penalize or tax dual citizens? Right!
James Fitz-Morris wrote “RDSPs, RESPs exempted. Canada also successfully negotiated exemptions for most of the registered accounts held by Canadians.
Until now, the IRS did not recognize accounts such as RDSPs and RESPs, and treated them as “off-shore trusts” — and taxed them accordingly.
The special tax-exempt status of TFSAs will also be recognized.”
He doesn’t seem to recognize that although they aren’t reportable under FATCA, they are still taxable in the US.
The only good news is the exemption of Canadian citizens from the IGA handover of information. Has anyone found such an exemption? Of course, the fact that the CRA won’t collect a debt for the IRS against a Canadian citizen is good. But then why would the IRS need that Canadian’s banking information? That would be bullshit written to cover bullshit.
@bubblebustin: but why would anyone report them. How is the IRS going to find out? You are your own worst enemy. I never reported a single TFSA to the United States ever. I encourage all Canadian residents to do the same.
This IGA can be updated at anytime I would suspect, exemptions can be removed, the U.S. just wanted to get its foot in the door.
Stateless
On w8ben does it ask if you are us person for tax person did you complete all the tax requirement.
So what day is the magic under 50,000$?. In theory if someone had 65,000 today in a checking account, they could transfer $15,000 to TFSA and be ok?
“This is strictly a tax information-sharing agreement. This agreement will not impose any U.S. taxes or penalties on U.S. citizens or U.S. residents holding accounts in Canada. The CRA does not collect the U.S. tax liability of a Canadian citizen if the individual was a Canadian citizen at the time the liability arose. This includes dual Canada-U.S. citizens. That will not change under this agreement.”
– Kerry-Lynne D. Findlay, Minister of National Revenue
Can this be counted on?
Official instructions for W8 Ben;
“Do not send Forms W-8 to the IRS. Instead, keep the forms in your records for as long as they may be relevant to the determination of your tax liability under section 1461. “
Canadian Bankers Association has a statement out praising the agreement:
Toronto, ON, February 5, 2014 – The CBA has been very clear on FATCA (the Foreign Account Tax Compliance Act) from the beginning: while we understand that the U.S. government is attempting to address tax evasion, we have opposed how they are going about it with FATCA. Canada is not a tax haven and Americans do not move here to evade taxation.
Despite international opposition, including from Canada, the FATCA implementation deadline remains unchanged, so we have agreed with the federal government that entering into an intergovernmental agreement (IGA) is the best approach under the circumstances. We recognize and support the efforts that the Canadian government has made. The alternative would potentially expose Canadians to punitive U.S. withholding taxes on income from their investments, including retirement income, of 30 per cent. The IGA should avoid that and ensure that the domestic rights of Canadians are respected while still sharing relevant taxpayer information bilaterally.
FATCA is simply one part of the new global reality. The G20 has stated publicly that the best method of addressing tax evasion internationally is through the expanded use of tax information sharing and they have asked the OECD to develop “a new single global standard for automatic exchange of information.”
The IGA is the framework but the details of how banks and other financial institutions will implement the IGA will be outlined in the implementing legislation and the Canada Revenue Agency guidelines. We will be reviewing the legislation and guidelines when they are released.
More information will be communicated to bank customers by the banks, the CBA and through Canada Revenue Agency.
Welcome to the newspeak which will follow this thing.
http://www.theglobeandmail.com/report-on-business/ottawa-to-give-irs-information-on-americans-in-canada/article16710461/
May the cards and letters begin to pour…
Anyone up for a class-action suit yet?
ARGH!!!!!!!!!!!!!!!
http://online.wsj.com/article/BT-CO-20140205-710192.html?mod=wsj_share_twitter
http://business.financialpost.com/2014/02/05/canada-signs-agreement-to-dull-impact-of-u-s-crackdown-on-tax-cheats/
I received a W8BEN IRS tax form today from a non U.S. bank asking me a non U.S. person to sign under penalties of perjury that I’m not a U.S. person, the bank says this is how they are required to prove non U.S. personhood as they already have a certified copy of my CLN.
@All
47 pages to say YES Canada will kiss your ass. You can your slaves information.
Does this part mean it’s just going to be attached to the Treaty and that Parliament won’t have to vote on it?
The Competent Authorities of Canada and the United States shall enter into an agreement
or arrangement under the mutual agreement procedure provided for in Article XXVI of
the Convention, which shall:
a) establish the procedures for the automatic exchange obligations described in
Article 2 of this Agreement;
b) prescribe rules and procedures as may be necessary to implement Article 5 of this
Agreement; and
c) establish as necessary procedures for the exchange of the info
@all.. I will still vote..It will be for an independant new party. want to start one?
And as expected, the escape clause………….
Article 6
Mutual Commitment to Continue to Enhance the Effectiveness of Information Exchange
and Transparency
1. Reciprocity. The Government of the United States acknowledges the need to achieve
equivalent levels of reciprocal automatic information exchange with Canada. The
Government of the United States is committed to further improve transparency and
enhance the exchange relationship with Canada by pursuing the adoption of regulations
and advocating and supporting relevant legislation to achieve such equivalent levels of
reciprocal automatic information exchange
Well I’m pretty much speechless….
@Trishia,
you many need something but you don’t always get it.. Canada don’t hold your breathe.
@Stateless Man
That is ridculous. Is this where the refusals begin?
4. Notwithstanding a finding of U.S. indicia under subparagraph B(1) of this
section, a Reporting Canadian Financial Institution is not required to treat
an account as a U.S. Reportable Account if:
a) Where the Account Holder information unambiguously indicates a
U.S. place of birth, the Reporting Canadian Financial Institution
obtains, or has previously reviewed and maintains a record of:
(1) A self-certification that the Account Holder is neither a
U.S. citizen nor a U.S. resident for tax purposes (which
may be on an IRS Form W-8 or other similar agreed form);
(2) A non-U.S. passport or other government-issued
identification evidencing the Account Holder’s citizenship
or nationality in a country other than the United States; and
(3) A copy of the Account Holder’s Certificate of Loss of
Nationality of the United States or a reasonable explanation
of:
(a) The reason the Account Holder does not have such a
certificate despite relinquishing U.S. citizenship; or
(b) The reason the Account Holder did not obtain U.S.
citizenship at birth
Page 22 of 47
Page 46 of 47
IV. Accounts Excluded from Financial Accounts
The following accounts and products established in Canada and maintained by a
Canadian Financial Institution shall be treated as excluded from the definition of
Financial Accounts, and therefore shall not be treated as U.S. Reportable Accounts under
the Agreement:
A. Registered Retirement Savings Plans (RRSPs) – as defined in subsection 146(1)
of the Income Tax Act.
B. Registered Retirement Income Funds (RRIFs) – as defined in subsection 146.3(1)
of the Income Tax Act.
C. Pooled Registered Pension Plans (PRPPs) – as defined in subsection 147.5(1) of
the Income Tax Act.
D. Registered Pension Plans (RPPs) – as defined in subsection 248(1) of the Income
Tax Act.
E. Tax-Free Savings Accounts (TFSAs) – as defined in subsection 146.2(1) of the
Income Tax Act.
F. Registered Disability Savings Plans (RDSPs) – as defined in subsection 146.4(1)
of the Income Tax Act.
G. Registered Education Savings Plans (RESPs) – as defined in subsection 146.1(1)
of the Income Tax Act.
H. Deferred Profit Sharing Plans (DPSPs) – as defined in subsection 147(1) of the
Income Tax Act.
I. AgriInvest accounts – as defined under “NISA Fund No. 2” and “net income
stabilization account” in subsection 248(1) of the Income Tax Act including
Quebec’s Agri-Quebec program as prescribed in section 5503 of the Income Tax
Regulations.
J. Eligible Funeral Arrangements – as defined under subsection 148.1 of the Income
Tax Act.
K. Escrow Accounts. An account maintained in Canada established in connection
with any of the following:
1. A court order or judgment.
2. A sale, exchange, or lease of real or immovable property or of personal or
movable property, provided that the account satisfies the following
requirements:
a. The account is funded solely with a down payment, earnest money,
deposit in an amount appropriate to secure an obligation directly
related to the transaction, or a similar payment, or is funded with a
financial asset that is deposited in the account in connection with
the sale, exchange, or lease of the property;
b. The account is established and used solely to secure the obligation
of the purchaser to pay the purchase price for the property, the
seller to pay any contingent liability, or the lessor or lessee to pay
for any damages relating to the leased property as agreed under the
lease;
c. The assets of the account, including the income earned thereon,
will be paid or otherwise distributed for the benefit of the
purchaser, seller, lessor, or lessee (including to satisfy such
person’s obligation) when the property is sold, exchanged, or
surrendered, or the lease terminates;
d. The account is not a margin or similar account established in
connection with a sale or exchange of a financial ass
@Trishia I’m guessing this is just the easiest way for the Banks to have a uniform way of proving non U.S. personhood, I would guess we will see major Canadian bank incorporate the same policy.
I don’t know if the Banks send in this document to the IRS (I’m waiting for an answer) or just keep it on record as proof they are in compliance when they need to prove it.
The “good news”
Page 7
7. All information exchanged shall be subject to the confidentiality and other protections provided for in the Convention, including the provisions limiting the use of the information exchanged.
Page 15
a) Canada shall not be obligated to obtain and exchange information with respect to a calendar year that is prior to the calendar year with respect to which similar information is required to be reported to the IRS by participating FFIs pursuant to relevant U.S. Treasury Regulations;
b) Canada shall not be obligated to begin exchanging information prior to the date by which participating FFIs are required to report similar information to the IRS under relevant U.S. Treasury Regulations;
Page 16
1. Reciprocity. The Government of the United States acknowledges the need to achieve equivalent levels of reciprocal automatic information exchange with Canada. The Government of the United States is committed to further improve transparency and enhance the exchange relationship with Canada by pursuing the adoption of regulations and advocating and supporting relevant legislation to achieve such equivalent levels of reciprocal automatic information exchange.
Page 22, This is important because it uses the word RELINQUISH and not RENOUNCE. Someone on the Canada side knew what they were doing on this point. Other countries IGA need to get most favorable provision on this one.
(a) The reason the Account Holder does not have such a certificate despite relinquishing U.S. citizenship; or
Page 39 are the exempt accounts…Page 45…nice they included escrow accounts.
“No U.S. taxes or penalites are to be applied to U.S. citizens, or dual citizens, with bank accounts in Canada, the officials added.”
I don’t get it. There just going to collect the information but now penalize or tax dual citizens? Right!
http://online.wsj.com/article/BT-CO-20140205-710192.html?mod=wsj_share_twitter
James Fitz-Morris wrote “RDSPs, RESPs exempted. Canada also successfully negotiated exemptions for most of the registered accounts held by Canadians.
Until now, the IRS did not recognize accounts such as RDSPs and RESPs, and treated them as “off-shore trusts” — and taxed them accordingly.
The special tax-exempt status of TFSAs will also be recognized.”
He doesn’t seem to recognize that although they aren’t reportable under FATCA, they are still taxable in the US.
The only good news is the exemption of Canadian citizens from the IGA handover of information. Has anyone found such an exemption? Of course, the fact that the CRA won’t collect a debt for the IRS against a Canadian citizen is good. But then why would the IRS need that Canadian’s banking information? That would be bullshit written to cover bullshit.
Sorry the CBC Fitz-Morris article:
http://www.cbc.ca/news/politics/fatca-deal-takes-some-heat-off-canadian-banks-1.2524444
@bubblebustin: but why would anyone report them. How is the IRS going to find out? You are your own worst enemy. I never reported a single TFSA to the United States ever. I encourage all Canadian residents to do the same.
This IGA can be updated at anytime I would suspect, exemptions can be removed, the U.S. just wanted to get its foot in the door.
Stateless
On w8ben does it ask if you are us person for tax person did you complete all the tax requirement.
So what day is the magic under 50,000$?. In theory if someone had 65,000 today in a checking account, they could transfer $15,000 to TFSA and be ok?
“This is strictly a tax information-sharing agreement. This agreement will not impose any U.S. taxes or penalties on U.S. citizens or U.S. residents holding accounts in Canada. The CRA does not collect the U.S. tax liability of a Canadian citizen if the individual was a Canadian citizen at the time the liability arose. This includes dual Canada-U.S. citizens. That will not change under this agreement.”
– Kerry-Lynne D. Findlay, Minister of National Revenue
Can this be counted on?
Official instructions for W8 Ben;
“Do not send Forms W-8 to the IRS. Instead, keep the forms in your records for as long as they may be relevant to the determination of your tax liability under section 1461. “
Canadian Bankers Association has a statement out praising the agreement:
http://www.cba.ca/en/media-room/65-news-releases/702-canadian-bankers-association-statement-on-fatca-canada-us-intergovernmental-agreement
For Immediate Release
Toronto, ON, February 5, 2014 – The CBA has been very clear on FATCA (the Foreign Account Tax Compliance Act) from the beginning: while we understand that the U.S. government is attempting to address tax evasion, we have opposed how they are going about it with FATCA. Canada is not a tax haven and Americans do not move here to evade taxation.
Despite international opposition, including from Canada, the FATCA implementation deadline remains unchanged, so we have agreed with the federal government that entering into an intergovernmental agreement (IGA) is the best approach under the circumstances. We recognize and support the efforts that the Canadian government has made. The alternative would potentially expose Canadians to punitive U.S. withholding taxes on income from their investments, including retirement income, of 30 per cent. The IGA should avoid that and ensure that the domestic rights of Canadians are respected while still sharing relevant taxpayer information bilaterally.
FATCA is simply one part of the new global reality. The G20 has stated publicly that the best method of addressing tax evasion internationally is through the expanded use of tax information sharing and they have asked the OECD to develop “a new single global standard for automatic exchange of information.”
The IGA is the framework but the details of how banks and other financial institutions will implement the IGA will be outlined in the implementing legislation and the Canada Revenue Agency guidelines. We will be reviewing the legislation and guidelines when they are released.
More information will be communicated to bank customers by the banks, the CBA and through Canada Revenue Agency.
The federal Department of Finance has information on the FATCA IGA on its website at this link:
http://www.fin.gc.ca/n14/14-018-eng.asp