H. Any Central Cooperative Credit Society as defined in section 2 of the Cooperative
Credit Associations Act and whose accounts are maintained for member financial
institutions.
My my. I think you’ve got it!
Up your noses, Canadian Bankers Association!
Act accordingly folks. Those of you who aren’t already fully into credit unions.
Not surprising, really. Credit unions are provincially regulated, not federally regulated. Would even Harper want to face Pauline Marois and tell her that all those big Quebec credit unions have to follow an agreement The Harper Government negotiated in secret and with no consultation with any of the provinces, never mind Quebec? Can you say “separation” Mr. Harper? Same argument applies in all provinces. Good luck getting any provincial consensus even under the Amending Formula on this …
There are enough US persons in Canada to create our own Credit Union.
No it doesn’t.
It just changes the definition of credit union to be consistent with the Canadian definition. The credit union would still have to have assets under $175 million to be a “Deemed-Compliant Financial Institutions” under section 1741.
There are not many banks or credit unions that fit that category.
Please note that at least some credit unions don’t have investment accounts in the markets, for that they go through brokerage firms which are going to have to prove compliance (and probably already all have mechanisms in place for this). So your TFSA may be limited to savings accounts or term deposits with the credit union. Not the growth potential of the alternatives, but on the other hand, work out what compliance costs and penalties might cost you, and contemplate loss of growth potential but no loss of principal invested, vs having your principal hammered to death.
Another factor to work into the mix as each affected person contemplates what is best for him/her and his/her family, under the circumstances.
Concur.
That exception is also in line with the “Financial Institution with a Local Client Base” exception.
I have noticed in the EU, many financial institutions seem to be acting in a manner to become compliant with the Local Client Base exception.
In Canada, you are screwed because the big banks all operate cross border but that is not fully the case in the EU.
If I can bank at a solely incountry bank that does not solicit accounts from the USA and do it all in peace, that is OK I suppose.
Do you have any other type of financial entities that this may apply to? In the UK, Building Societies, Co-Operatives, Friendly Societies and Credit Unions are all exempt as they are all local base.
I hope for the sake of my country that Just a Canadian is wrong in his interpretation. Otherwise, with reference to my earlier reference to Madam Marois, the rumoured Quebec provincial election later this year is going to get very messy. Stephen Harper and Jim Flaherty may go down in Canadian history, or what will remain of it, as having done more damage to our country’s national unity than even Brian Mulroney when he invited Lucien Bouchard and a bunch of other closet separatists into his cabinet, leading ultimately to the foundation of the Bloc Quebecois, its rise to the bizarre state of Official Opposition for a while, and the very near destruction of Canada in the 1995 Quebec Referendum.
If this isn’t part of Harper’s “secret agenda.” then he and Flaherty are even bigger fools (and inadvertent if not outright traitors to Canada) than I’ve thought.
@George
The “Financial Institution with a Local Client Base” is the interesting one to me. Mostly because of the phrase “specified U.S. Person who is not a resident of Canada”. That would seem to imply that a bank could be a “Deemed-Compliant Financial Institutions” as long as any US Persons were Canadian residents.
It also requires following Annex I so I am not sure how to reconcile these 2 statements.
@JustA Canadian;
This may help. The UK is further along than Canada. HMRC has published implimentation guidance that goes into detail.
The UK guidance should work in Canada because we know there were no negotiations.
But my general observation in the EU is that it appears there are local client base firms trying to fit into that exception by the questions they now ask on their forms.
@JustA Canadian;
Here is why I am wondering on the credit union exemption. I did not know they were regulated by each Province, hey I live in the EU.
Can a FATCA IGA bind a provincially regulated credit union?
If you can not bind, then politically you exclude.
KPMG has guidance to the HMRC guidance,which seems to indicate a larger credit union could fall under the the local client base language.
That is why I find the reference to annex I troubling. There is no indication in the UK rules that they have to try to identify US Persons, all they must do I verify that the account holders are UK residents. This will not a be a problem since IIRC Canadian credit unions are not allowed to open accounts for non residents in the first place.
However, the Canadian deal does have a reference to the policy and procedures of annex I, which is all about Identifying US Persons. The UK rules do not mention annex I in this section and I am not sure if the difference is significant.
Just A Canadian;
Remember that all these prototype documents have the most favored provisions clause. Hence why I like Canada RELINQUISH language instead of RENOUNCE.
But it looks like you came across something else. Need to print out and lay them side by side.
If the spriit/ethos of the IGA is let local client firms go free in peace but pin down the trans national firms that seek US resident clients, that could be tolerable. But if that was the case why did they not sell it like that as everyone would have said OK.
To be brutally honest, it was wrong for those Swiss firms soliciting US residents to open accounts.
@Geroge – UK banks aren’t going to sweat getting all the data spot on, the fines are peanuts compared what they’ve paid on PPI (£ billions) and not to mention all the money they paid out refunding banking fees.
Paying out a maximum of £3000 for a mistake, and it’s like to be less than that. Also what incentive does HM Treasury really have to slap down a British bank for providing dodge FATCA data.
I can see the scenario. The IRS complains about the data integrity, the HMRC says they’ll look into it for next year, tell UK banks this is for real and you have to be good little boys for FATCA, the tennis ball keeps going back and forth between the UK and US, until something big happens, a billionaire has been caught out and the US demands escalation.
The bottom line is the HMRC has ever incentive to play lip service to FATCA, upload the garbage in garbage out data to the IRS and leave the rest to chance.
At some point someone in HMRC is going to suggest pay lip service until someone higher up in the UK government complains, which the HMRC will respond what is our job? Are we paid collecting taxes for the UK or the Yanks when we send over shed loads of expensive data paid for by UK banks, and because we’re an RBT country making few hits with US data and collecting sweet FA in additional tax for the UK.
FATCA will always be put on the back burner because cracking down on ‘known’ tax havens like Jersey, Caymans, and others is more profitable than using US FATCA data. For the HMRC who pays out wages? It’s not the Yanks. We go through all this trouble because the Yanks are blackmailing us with a 30% withholding tax?
I tried to explain this weeks ago with my version of “Bank Transfer Day” (not just a day of course) where EVERY AMERICAN WATCHIMICALLIT withdraws and closes every bank account they have *where possible* and shifts to a Credit Union. Credit Unions have NOTHING to gain by revealing who their clients are because the USA cannot hurt them as they are not authorized to do business outside of their Province. As for incoming US funds I don’t really know.
So, if the banks think they are off the hook in Canada I say hey……not so fast buddy. Start counting the billions of dollars you are going to lose when 5 million people in Canada each with 3 or more accounts start closing them !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! This should be our number one method for making banking as uncomfortable as we can for members of the Canadian Bankers Assholios
I agree CBE! I will be opening up a CU account asap, but I will have to wait a bit before I can close my bank accounts since I have a mortgage that still has time on it and my hubby does not want to pay the penalties for switching it. At least I don’t have to cash my RESPs and TSFAs and RRSPs and keep the cash under my pillow for now.
Does anyone know where we can get a list of credit unions with under the 175 million in assets?
Why doesn’t someone check with a lawyer at the next meeting of problem of Feb with lawyer.
uspension of Rules Relating to Recalcitrant Accounts
.
The United States
shall not require a ReportingCanadian Financial Institution to withhold tax under section 1471 or 1472 of the U.S. Internal Revenue Code with respect to an account held by a recalcitrant account holder (as defined in section 1471
(d)(6)of the U.S. Internal Revenue Code), or to close such account, if the U.S.Competent Authority receives the information set forthin sub paragraph 2(a) of Article 2 of this Agreement, subject to the provisions of Article 3 of this Agreement, with respect to such account
Copying from a PDF is a pain especially when you run no scripts
“Notwithstanding paragraph 3 of this Article, with respect to each Reportable Account that
is maintained by a Reporting Financial Institution as of June 30,
2014, and subject to paragraph 4 of Article 6 of this Agreement
, the Parties are not required to obtain and include in the exchanged information the
Canadian TIN or the U.S. TIN, as applicable, of any relevant person if such taxpayer identifying number is
not in the records of the Reporting Financial Institution. In such a case, the Parties shall obtain and include in the exchanged information the date of birth of the relevant person, if the Reporting Financial
Institution has such date of birth in its records.” page 12
Credit union no
“Smaller deposit-taking institutions, such as credit unions, with assets of less than $175 million will be exempt from reporting. ” http://www.fin.gc.ca/afc/faq/fatca-eng.asp
People should assume that any present obstacles to data sharing will be changed in the future…
@George3rd
They cannot close a Recalcitrant Account but they still have to turn over the account number. I am sure the IRS will find a way to match the account number with name most of the time.
Just made sure no accounts that are reportable are above reporting threshold.
Who’s to say that the Harper Government won’t pass a bill, making credit unions fall under federal regulation, instead of provincial regulation, and then tell the provinces ‘too bad’ if they didn’t like it?
What will Harper not do that is bad for Canada?
Yes, I would agree that Harper doing that would piss off the provinces, especially Quebec. But what is Quebec going to do other than bluster? They’re so dependent on the equalization teat that separating would send them straight into Third World status. And what of the First Nations that aren’t willing to go with Quebec? They’ll definitely demand to remain in Canada, and that will mean that Quebec will be partitioned like like Canada.
Let’s not forget that Harper really could care less about Quebec anyway, and became Prime Minister with a MAJORITY government, WITHOUT Quebec. Let’s also realize that there are also a LOT of Canadians that would be happy if Quebec just went and seceded. Apparently, between the equalization issues, and the events of 1995, along with the failure of the Meech Lake accord, there is still a lot of bad blood flowing around. Even my wife has said that she would be happy if Quebec just left.
Ontario as a have-not province isn’t in much better shape themselves, so unless they’re willing to gain a backbone, and risk their own equalization payments, they will just roll over and comply.
The other provinces are just too small to make a significant difference either way, so they’ll just roll over and take it.
That leaves Alberta, and somehow, I doubt they’ll make any move against Harper, a fellow Albertan, either.
Harper promised that Canada would be a different place when he’s done, and he’s not bullshitting, either.
also on page 44
H. Any Central Cooperative Credit Society as defined in section 2 of the Cooperative
Credit Associations Act and whose accounts are maintained for member financial
institutions.
My my. I think you’ve got it!
Up your noses, Canadian Bankers Association!
Act accordingly folks. Those of you who aren’t already fully into credit unions.
Not surprising, really. Credit unions are provincially regulated, not federally regulated. Would even Harper want to face Pauline Marois and tell her that all those big Quebec credit unions have to follow an agreement The Harper Government negotiated in secret and with no consultation with any of the provinces, never mind Quebec? Can you say “separation” Mr. Harper? Same argument applies in all provinces. Good luck getting any provincial consensus even under the Amending Formula on this …
There are enough US persons in Canada to create our own Credit Union.
No it doesn’t.
It just changes the definition of credit union to be consistent with the Canadian definition. The credit union would still have to have assets under $175 million to be a “Deemed-Compliant Financial Institutions” under section 1741.
There are not many banks or credit unions that fit that category.
Please note that at least some credit unions don’t have investment accounts in the markets, for that they go through brokerage firms which are going to have to prove compliance (and probably already all have mechanisms in place for this). So your TFSA may be limited to savings accounts or term deposits with the credit union. Not the growth potential of the alternatives, but on the other hand, work out what compliance costs and penalties might cost you, and contemplate loss of growth potential but no loss of principal invested, vs having your principal hammered to death.
Another factor to work into the mix as each affected person contemplates what is best for him/her and his/her family, under the circumstances.
Concur.
That exception is also in line with the “Financial Institution with a Local Client Base” exception.
I have noticed in the EU, many financial institutions seem to be acting in a manner to become compliant with the Local Client Base exception.
In Canada, you are screwed because the big banks all operate cross border but that is not fully the case in the EU.
If I can bank at a solely incountry bank that does not solicit accounts from the USA and do it all in peace, that is OK I suppose.
Do you have any other type of financial entities that this may apply to? In the UK, Building Societies, Co-Operatives, Friendly Societies and Credit Unions are all exempt as they are all local base.
I hope for the sake of my country that Just a Canadian is wrong in his interpretation. Otherwise, with reference to my earlier reference to Madam Marois, the rumoured Quebec provincial election later this year is going to get very messy. Stephen Harper and Jim Flaherty may go down in Canadian history, or what will remain of it, as having done more damage to our country’s national unity than even Brian Mulroney when he invited Lucien Bouchard and a bunch of other closet separatists into his cabinet, leading ultimately to the foundation of the Bloc Quebecois, its rise to the bizarre state of Official Opposition for a while, and the very near destruction of Canada in the 1995 Quebec Referendum.
If this isn’t part of Harper’s “secret agenda.” then he and Flaherty are even bigger fools (and inadvertent if not outright traitors to Canada) than I’ve thought.
@George
The “Financial Institution with a Local Client Base” is the interesting one to me. Mostly because of the phrase “specified U.S. Person who is not a resident of Canada”. That would seem to imply that a bank could be a “Deemed-Compliant Financial Institutions” as long as any US Persons were Canadian residents.
It also requires following Annex I so I am not sure how to reconcile these 2 statements.
@JustA Canadian;
This may help. The UK is further along than Canada. HMRC has published implimentation guidance that goes into detail.
http://www.hmrc.gov.uk/fatca/130531-guidance.pdf
The UK guidance should work in Canada because we know there were no negotiations.
But my general observation in the EU is that it appears there are local client base firms trying to fit into that exception by the questions they now ask on their forms.
@JustA Canadian;
Here is why I am wondering on the credit union exemption. I did not know they were regulated by each Province, hey I live in the EU.
Can a FATCA IGA bind a provincially regulated credit union?
If you can not bind, then politically you exclude.
KPMG has guidance to the HMRC guidance,which seems to indicate a larger credit union could fall under the the local client base language.
http://www.kpmg.com/UK/en/IssuesAndInsights/ArticlesPublications/Documents/PDF/Market%20Sector/Financial%20Services/fatca-where-are-we-now.pdf
@George
Your link doesn’t work. Try http://www.hmrc.gov.uk/drafts/uk-us-fatca-guidance-notes.pdf
That is why I find the reference to annex I troubling. There is no indication in the UK rules that they have to try to identify US Persons, all they must do I verify that the account holders are UK residents. This will not a be a problem since IIRC Canadian credit unions are not allowed to open accounts for non residents in the first place.
However, the Canadian deal does have a reference to the policy and procedures of annex I, which is all about Identifying US Persons. The UK rules do not mention annex I in this section and I am not sure if the difference is significant.
Just A Canadian;
Remember that all these prototype documents have the most favored provisions clause. Hence why I like Canada RELINQUISH language instead of RENOUNCE.
But it looks like you came across something else. Need to print out and lay them side by side.
If the spriit/ethos of the IGA is let local client firms go free in peace but pin down the trans national firms that seek US resident clients, that could be tolerable. But if that was the case why did they not sell it like that as everyone would have said OK.
To be brutally honest, it was wrong for those Swiss firms soliciting US residents to open accounts.
@Geroge – UK banks aren’t going to sweat getting all the data spot on, the fines are peanuts compared what they’ve paid on PPI (£ billions) and not to mention all the money they paid out refunding banking fees.
Paying out a maximum of £3000 for a mistake, and it’s like to be less than that. Also what incentive does HM Treasury really have to slap down a British bank for providing dodge FATCA data.
I can see the scenario. The IRS complains about the data integrity, the HMRC says they’ll look into it for next year, tell UK banks this is for real and you have to be good little boys for FATCA, the tennis ball keeps going back and forth between the UK and US, until something big happens, a billionaire has been caught out and the US demands escalation.
The bottom line is the HMRC has ever incentive to play lip service to FATCA, upload the garbage in garbage out data to the IRS and leave the rest to chance.
At some point someone in HMRC is going to suggest pay lip service until someone higher up in the UK government complains, which the HMRC will respond what is our job? Are we paid collecting taxes for the UK or the Yanks when we send over shed loads of expensive data paid for by UK banks, and because we’re an RBT country making few hits with US data and collecting sweet FA in additional tax for the UK.
FATCA will always be put on the back burner because cracking down on ‘known’ tax havens like Jersey, Caymans, and others is more profitable than using US FATCA data. For the HMRC who pays out wages? It’s not the Yanks. We go through all this trouble because the Yanks are blackmailing us with a 30% withholding tax?
I tried to explain this weeks ago with my version of “Bank Transfer Day” (not just a day of course) where EVERY AMERICAN WATCHIMICALLIT withdraws and closes every bank account they have *where possible* and shifts to a Credit Union. Credit Unions have NOTHING to gain by revealing who their clients are because the USA cannot hurt them as they are not authorized to do business outside of their Province. As for incoming US funds I don’t really know.
Does anyone remember this?
https://www.facebook.com/Nov.Fifth
http://www.andyworthington.co.uk/wp-content/uploads/banktransferday.jpg
So, if the banks think they are off the hook in Canada I say hey……not so fast buddy. Start counting the billions of dollars you are going to lose when 5 million people in Canada each with 3 or more accounts start closing them !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! This should be our number one method for making banking as uncomfortable as we can for members of the Canadian Bankers Assholios
I agree CBE! I will be opening up a CU account asap, but I will have to wait a bit before I can close my bank accounts since I have a mortgage that still has time on it and my hubby does not want to pay the penalties for switching it. At least I don’t have to cash my RESPs and TSFAs and RRSPs and keep the cash under my pillow for now.
Does anyone know where we can get a list of credit unions with under the 175 million in assets?
Why doesn’t someone check with a lawyer at the next meeting of problem of Feb with lawyer.
uspension of Rules Relating to Recalcitrant Accounts
.
The United States
shall not require a ReportingCanadian Financial Institution to withhold tax under section 1471 or 1472 of the U.S. Internal Revenue Code with respect to an account held by a recalcitrant account holder (as defined in section 1471
(d)(6)of the U.S. Internal Revenue Code), or to close such account, if the U.S.Competent Authority receives the information set forthin sub paragraph 2(a) of Article 2 of this Agreement, subject to the provisions of Article 3 of this Agreement, with respect to such account
Copying from a PDF is a pain especially when you run no scripts
“Notwithstanding paragraph 3 of this Article, with respect to each Reportable Account that
is maintained by a Reporting Financial Institution as of June 30,
2014, and subject to paragraph 4 of Article 6 of this Agreement
, the Parties are not required to obtain and include in the exchanged information the
Canadian TIN or the U.S. TIN, as applicable, of any relevant person if such taxpayer identifying number is
not in the records of the Reporting Financial Institution. In such a case, the Parties shall obtain and include in the exchanged information the date of birth of the relevant person, if the Reporting Financial
Institution has such date of birth in its records.” page 12
Credit union no
“Smaller deposit-taking institutions, such as credit unions, with assets of less than $175 million will be exempt from reporting. ”
http://www.fin.gc.ca/afc/faq/fatca-eng.asp
People should assume that any present obstacles to data sharing will be changed in the future…
@George3rd
They cannot close a Recalcitrant Account but they still have to turn over the account number. I am sure the IRS will find a way to match the account number with name most of the time.
Just made sure no accounts that are reportable are above reporting threshold.
Who’s to say that the Harper Government won’t pass a bill, making credit unions fall under federal regulation, instead of provincial regulation, and then tell the provinces ‘too bad’ if they didn’t like it?
What will Harper not do that is bad for Canada?
Yes, I would agree that Harper doing that would piss off the provinces, especially Quebec. But what is Quebec going to do other than bluster? They’re so dependent on the equalization teat that separating would send them straight into Third World status. And what of the First Nations that aren’t willing to go with Quebec? They’ll definitely demand to remain in Canada, and that will mean that Quebec will be partitioned like like Canada.
Let’s not forget that Harper really could care less about Quebec anyway, and became Prime Minister with a MAJORITY government, WITHOUT Quebec. Let’s also realize that there are also a LOT of Canadians that would be happy if Quebec just went and seceded. Apparently, between the equalization issues, and the events of 1995, along with the failure of the Meech Lake accord, there is still a lot of bad blood flowing around. Even my wife has said that she would be happy if Quebec just left.
Ontario as a have-not province isn’t in much better shape themselves, so unless they’re willing to gain a backbone, and risk their own equalization payments, they will just roll over and comply.
The other provinces are just too small to make a significant difference either way, so they’ll just roll over and take it.
That leaves Alberta, and somehow, I doubt they’ll make any move against Harper, a fellow Albertan, either.
Harper promised that Canada would be a different place when he’s done, and he’s not bullshitting, either.