MEP Sophia In’t Veld speaking on FATCA in February.
MEP Sophia In’t Veld speaking on FATCA in February.
5. States could withhold taxes as part of federal FATCA withholding. The Foreign Account Tax Compliance Act (FATCA) prescribes a 30 percent federal withholding tax on companies that transfer funds to foreign financial institutions that do not comply with U.S. disclosure and reporting requirements. States that collect income taxes could withhold state taxes on these funds at the same time.
Joined by coalition of US small businesses demanding immediate implementation of FATCA.
This is good in a twisted way. Canadian politicians don’t go after their “own.” Real embarrassing for Liberal Senator Percy Downe of PEI to have a fellow party member in this situation.
A prominent Canadian lawyer, husband to a Liberal senator, moved nearly $2 million to secretive financial havens while he was locked in battle with the Canada Revenue Agency over his taxes, according to documents in a massive leak of offshore financial data that were shared exclusively in Canada with CBC News.
Senator Pana Merchant, left, was named as a beneficiary of a trust set up by her husband, lawyer Tony Merchant.
Tony Merchant of Regina, dubbed Canada’s class-action king because of the large settlements he has won for his clients, transferred money to a tax haven in the South Pacific and then onward to an account in the Caribbean, according to the files. His wife, Senator Pana Merchant, as well as their three sons are named in the documents as beneficiaries of the funds.
The transactions are detailed in a huge leak of offshore financial information received by the Washington, D.C.-based International Consortium of Investigative Journalists, a non-profit group that has shared the records with CBC News and media outlets in 35 other countries. It is thought to be one of the biggest ever leaks of financial data.
I thought this might be a good opportunity to remind people that Canada has bank secrecy laws too. Remember PIPEDA.
From the privacy commissioner
PIPEDA requires private-sector organizations to collect, use or disclose your personal information by fair and lawful means, with your consent, and only for purposes that are stated and reasonable.
They’re also obliged to protect your personal information through appropriate security measures, and to destroy it when it’s no longer needed for the original purposes.
You have the right to expect the personal information the organization holds about you to be accurate, complete and up-to-date. That means you have a right to see it, and to ask for corrections if they got it wrong.
If you think an organization covered by PIPEDA is not living up to its obligations, you should try to address your concerns directly with the organization. If that doesn’t work, you have the option of lodging a complaint with the Privacy Commissioner.
PIPEDA applies to the personal information collected, used or disclosed by organizations engaged in commercial activities, from banks and retail outlets to airlines, communications companies and law firms. It applies equally to small and big businesses, whether they operate out of an actual building or only online. The law, which has been fully in force since 2004, applies to private enterprises across Canada.
There are exceptions: Many private enterprises operating within British Columbia, Alberta and Quebec are covered not by PIPEDA but by similar provincial statutes.
But, even in those provinces, PIPEDA applies to organizations under federal jurisdiction, such as companies involved in banking, transportation, broadcasting or telecommunications. For those businesses, PIPEDA also applies to the personal information of employees.
Another law, called the Privacy Act, protects the privacy of your dealings with federal government departments, agencies and Crown corporations
Interesting and funny video, however the FATCA and citizenship-based tax starts about a quarter of the way in.
Upon further watching, this is a MUST WATCH.
Interesting. Blame clearly directed at the White House and Obama personally. I think he gives some pretty good analysis of where things actually stand behind closed doors in Washington right now. Not great but not as totally bad and inevitable as the FATCA Compliance complex might want you to think.
Interesting tussle between Conservative Alberta Finance Minister Doug Horner and Jim Flaherty (and indirectly by the way between Doug Horner and the Canadian Bankers Association).
The province’s finance minister, Doug Horner, said Alberta was happy to discuss greater cooperation with Ottawa, especially in the realm of systemic risk. But the energy-rich province, which is seen as a key player in creating the critical mass of support that would pave the way for a national regulator, is not about to dismantle its own financial watchdog.
“We’re talking about a collaborative system. It isn’t that we’re going to go to a common securities regulator and have one office somewhere,” Horner said in an interview on Wednesday. “That’s been pretty much off the table for provinces for some time.”
But Horner dismissed the idea of a central regulator and said provincial finance ministers who met in Montreal on Monday wanted instead to consider improvements to an existing “passport” system.
I think perhaps it is time to replace Mr. Flaherty as Federal Finance Minister with Mr. Horner of Alberta a man who likes using words like SOVERIEGN, NO, NOT, and WON’T.
What is the Ponsonby Rule, or better yet, its modern Canadian version? Basically, it sets out the process under Canadian law for ratifying international treaties. The key part is as follows:
For treaties that require implementing legislation before the Government can proceed to ratification, acceptance, approval or accession (“ratification”), the Government will:
So what does this mean? Well in theory it is too late for the government to stick the implementation authority for a FATCA IGA into the spring budget implementation act. Parliament is going to be going to be going on a two week recess after Friday, after tomorrow, which means the 21 sitting day waiting period only begins when Parliament comes back. In fact the soonest FATCA implementation legislation can be introduced is May 21st which is long after the budget bill will be introduced and too late for standalone legislation to be passed prior to the Summer recess.
So would the Conservatives and Flaherty break their own treaty ratification policy (the above Canadian version of the “Ponsonby” rule was actually introduced by the Conservatives in particular foreign minister Maxime Bernier in 2008)? Well shortly after introducing it in 2008 Jim Prentice ”almost” broke it involving ratifying a copyright treaty but backed off after understanding the implications of doing so. All I can say is the Conservatives don’t have many good options to implement an IGA. The one easy way is to abuse power even beyond what they have done already in other areas of policy. On the other hand they have backed off from controversial legislation when they price of getting it through was too much even for them.
From MEP Sophia In’t Veld
The United States Foreign Account Tax Compliance Act (FATCA) requires that foreign financial institutions register with the US Internal Revenue Service (IRS) and promise to identify, collect and report information on US clients’ offshore bank accounts. According to Financial News, entities must register by 25 October 2013 in order to be included on the IRS’s list of compliant institutions to be released in December 2013(1). In order to facilitate this process and ease the burden on financial entities, a number of countries have embarked on negotiations on so-called intergovernmental agreements (IGAs) with the United States on how to implement FATCA rules.
1. Can the Commission clarify which Member States have to date concluded IGAs on FATCA?
2. Can the Commission clarify on what legal basis it is ‘coordinating’ the bilateral agreements and conducting talks with the United States? What mandate does the Commission have to engage in talks with the United States?
3. Can the Commission clarify whether these IGAs can be modified or suspended unilaterally by the United States?
4. Can the Commission clarify whether, in its view, the reciprocity clause does indeed mean complete symmetry?
5. Can the Commission clarify the situation for foreign financial institutions from Member States that have not concluded an IGA? Would the foreign financial institutions in these countries be at risk of violating European law, notably data protection law?
6. Can the Commission clarify whether the European Data Protection Supervisor and the article 29 Data Protection Working Party (WP29) have been consulted on the model agreements, and whether they approve?
7. Can the Commission explain how FATCA and the IGAs relate to the new EU proposals for fighting tax avoidance and tax evasion?
8. Can the Commission clarify whether, once the Savings Tax Directive is in force, the United States could theoretically gain access to data from all the Member States through a handful of bilateral agreements?
9. Can the Commission clarify whether it has conducted an assessment of the financial, administrative and economic impact of the FATCA on European businesses, and whether European businesses are potentially at a competitive disadvantage compared to their US counterparts?
and the response from the EU Commission
. So far, the United Kingdom, Denmark, and Ireland have signed FATCA Model 1(1) intergovernmental agreements (IGAs) with the US, while Germany, Spain and Italy have initialled such IGAs. .
2. The US is negotiating with each Member State on a bilateral basis; the Commission is not involved in these negotiations nor is it coordinating them. .
3. A FATCA IGA may be amended by written mutual consent of the Parties; either Party may terminate the IGA by giving notice of termination in writing to the other Party. .
4. The reciprocity clause included in the Model 1 IGA commits the US to achieving ‘equivalent’ levels of reciprocal automatic information exchange with FATCA partners. .
5. See response to Question E-2760/12. .
6. The Commission consulted the article 29 Data Protection Working Party (WP29) on FATCA and the Model IGAs. The opinions provided by the WP29 can be found on the Europa website(2). .
7. FATCA and the IGAs, as US initiatives, are not part of the recent Commission Action Plan(3) to strengthen the fight against tax fraud and tax evasion. However, the Model 1 IGAs are in line with one of the proposed actions i.e. promoting the automatic exchange of information as the future EU and international standard of transparency in tax matters. .
8. No, that will not be the case. .
9. The Commission has not conducted such an assessment but several EU businesses have done so(4). FATCA IGAs will also affect US businesses which will be required to act as withholding agents and also to report certain information about EU residents.