FATCA Discussion Thread (Ask your questions) Part Two
Please ask your questions here about FATCA.
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May have more to do with Corporate taxes. Check if OECD supports citizen based taxation.
GeorgeIII,
This seems to be more “individual” related.
http://www.fin.gc.ca/treaties-conventions/maatm-aammf-eng.asp
Date modified: 2013-11-20
Preamble
The member States of the Council of Europe and the member countries of the Organisation for Economic Co-operation and Development (OECD), signatories of this Convention,
Considering that the development of international movement of persons, capital, goods and services – although highly beneficial in itself – has increased the possibilities of tax avoidance and evasion and therefore requires increasing co-operation among tax authorities;
Welcoming the various efforts made in recent years to combat tax avoidance and tax evasion on an international level, whether bilaterally or multilaterally;
Considering that a co-ordinated effort between States is necessary in order to foster all forms of administrative assistance in matters concerning taxes of any kind whilst at the same time ensuring adequate protection of the rights of taxpayers;
Recognising that international co-operation can play an important part in facilitating the proper determination of tax liabilities and in helping the taxpayer to secure his rights;
Considering that fundamental principles entitling every person to have his rights and obligations determined in accordance with a proper legal procedure should be recognised as applying to tax matters in all States and that States should endeavour to protect the legitimate interests of taxpayers, including appropriate protection against discrimination and double taxation;
Convinced therefore that States should carry out measures or supply information, having regard to the necessity of protecting the confidentiality of information, and taking account of international instruments for the protection of privacy and flows of personal data;
Considering that a new co-operative environment has emerged and that it is desirable that a multilateral instrument is made available to allow the widest number of States to obtain the benefits of the new co-operative environment and at the same time implement the highest international standards of co-operation in the tax field;
Desiring to conclude a convention on mutual administrative assistance in tax matters,
Have agreed as follows:
Chapter I – Scope of the Convention
Article 1 – Object of the Convention and persons covered
The Parties shall, subject to the provisions of Chapter IV, provide administrative assistance to each other in tax matters. Such assistance may involve, where appropriate, measures taken by judicial bodies.
Such administrative assistance shall comprise:
exchange of information, including simultaneous tax examinations and participation in tax examinations abroad;
assistance in recovery, including measures of conservancy; and
service of documents.
A Party shall provide administrative assistance whether the person affected is a resident or national of a Party or of any other State.
…
DECLARATIONS AND RESERVATIONS DEPOSITED BY THE GOVERNMENT OF CANADA WITH ITS INSTRUMENT OF RATIFICATION OF THE CONVENTION ON MUTUAL ADMINISTRATIVE ASSISTANCE IN TAX MATTERS, DONE AT STRASBOURG ON 25 JANUARY 1988, AS AMENDED BY THE PROTOCOL AMENDING THE CONVENTION ON MUTUAL ADMINISTRATIVE ASSISTANCE IN TAX MATTERS, DONE AT PARIS
ON 27 MAY 2010
Declarations for the Annexes to the Convention
Annex A
For Canada, the Convention shall apply only to the following taxes:
For the purpose of sub-paragraph 1(a) of Article 2 of the Convention, the taxes on income or profits, including capital gains that are added to income at a rate determined under the following act, and taxes on net wealth that are imposed on behalf of Canada under the Income Tax Act (Canada).
For the purpose of sub-paragraph 1(b)(iii)C of Article 2 of the Convention, the value-added tax imposed on behalf of Canada under Part IX of the Excise Tax Act (Canada).
For the purpose of sub-paragraph 1(b)(iii)D of Article 2 of the Convention, the taxes imposed on behalf of Canada under Parts I and III of the Excise Tax Act (Canada) and the Excise Act, 2001 (Canada).
Annex B
In the case of Canada, the term “competent authority” means the Minister of National Revenue or the Minister’s authorized representative.
Annex C
None
Reservations
Canada signed the Convention and would ratify the Convention, as modified by the Protocol, with the following reservations:
Canada will not provide any form of assistance in relation to the taxes of other parties described in any of sub-paragraphs 1(b)(i), (ii), (iii) A, B, E, F and G and (iv) of Article 2 of the Convention (as permitted by sub-paragraph 1(a) of Article 30 of the Convention).
Canada will not provide assistance in the recovery of any tax claim, or in the recovery of an administrative fine, for any tax, pursuant to Articles 11 through 16 of the Convention (as permitted by sub-paragraph 1(b) of Article 30 of the Convention).
Canada will not provide assistance in the service of document for any tax, pursuant to Article 17 of the Convention (as permitted by sub-paragraph 1(d) of Article 30 of the Convention); this reservation does not apply to the service of documents by mail, pursuant to paragraph 3 of Article 17 of the Convention.
Terms and Conditions | Transparency Date modified: 2013-11-20
I haven’t a clue what this means Calgary411. I have hoped all along that this Convention would allow the US to gracefully back out of FATCA. This could be something similar or better than FATCA which the US could acquiesce to in the name of cooperation, if they’re looking for a way out.
Here’s a poke in FATCA’s eye: “The Convention is the most comprehensive multilateral instrument available for all forms of tax cooperation to tackle tax evasion and avoidance”.
More in line with what the Russians are, also, saying; i.e. we object to unilateral FATCA?
FAQ’s: http://www.oecd.org/ctp/exchange-of-tax-information/MAC_Background_Brief_for_Jounalists_November_2013.pdf
3. Who has signed the Convention?
As of 18 November 2013, the signatories to the Convention are:
Albania,
Andorra,
Argentina,
Australia,
Austria,
Azerbaijan (original Convention only),
Belgium,
Belize,
Brazil,
Canada,
China,
Chile,
Colombia,
Costa Rica,
Croatia,
Czech Republic,
Denmark,
Estonia,
Finland,
France,
Georgia,
Germany,
Ghana,
Greece,
Guatemala,
Hungary,
Iceland,
India,
Indonesia,
Ireland,
Italy,
Japan,
Korea,
Latvia,
Lithuania,
Luxembourg,
Malta,
Mexico,
Moldova,
Morocco,
Netherlands,
New Zealand,
Nigeria,
Norway,
Poland,
Portugal,
Romania,
Russia,
Saudi Arabia,
Singapore,
Slovak Republic,
Slovenia,
South Africa,
Spain,
Switzerland,
Sweden,
Tunisia,
Turkey,
Ukraine,
United Kingdom, and
United States.
The signatories to the Convention represent a wide range of countries including major financial centres and developing countries. In addition, interest in the Convention continues to grow.
The following jurisdictions are also covered by the Convention through territorial extension by Denmark: the Faroe Islands and Greenland; by territorial extension by the Netherlands: Aruba, Curaçao and Sint Maarten; and by territorial extension by the United Kingdom: the Cayman Islands, Montserrat and Turks and Caicos.
A signing ceremony of the Convention will take place on 21 November in Jakarta on the occasion of the Global Forum on Transparency and Exchange of Information for tax purposes. A number of countries including Liechtenstein and San Marino will sign the Convention in Jakarta.
…
etc.
6. How is the Convention relevant to the standardized model for automatic exchange of information being developed by OECD and for the implementation of FATCA through Intergovernmental Agreements (IGAs)?
Both the standardised model, which is currently being developed by the OECD with G20 countries, and the IGAs are based on the automatic exchange of information from the tax administration of one country to the tax administration of the residence country.
As with other forms of exchange of information, a legal basis is needed to carry out automatic exchange. While bilateral treaties such as those based on Article 26 of the OECD Model Tax Convention would permit such exchanges, it may be more efficient to implement a single global standard through a multilateral instrument.
For more information on the OECD’s work on automatic exchange and the development of a common model for reporting and automatic exchange of certain account information held by financial institutions, including due diligence rules, please refer to the OECD website: http://www.oecd.org/tax/exchange-of-tax-information/.
Don’t let the fact that your financial institution has subsidiaries in countries under US sanctions stop you from jumping on the compliance bandwagon. Time is of the essence.
“Financial institutions have also reportedly been concerned about the cost of FATCA implementation and conflict with local laws. There may also be several Middle Eastern financial institutions that have subsidiaries or associates that provide services in countries that are under US sanctions. The short time frame for implementation requires immediate focus on key systems, information reporting and withholding.”
http://www.emiratesbusinesslaw.com/2013/11/21/fatca-implications-in-the-middle-east/
Pretty much everyone except Tina Turner are renouncing US citizenship because of FATCA, according to Brian Mahany:
“Certainly taxes have driven record numbers of Americans to renounce their citizenship and expatriate. Non-resident aliens are tearing up their green cards too. Not everyone leaves because of taxes, however…
We don’t believe that Tina Turner relinquished her citizenship because of FATCA. As the Justice Department and IRS ramp up their offshore reporting enforcement efforts, however, many other Americans are turning in their passports and giving up their citizenship.”
Together with the tax treaties from long ago—recognizing the right of USA to tax all citizens in the Milky Way, itlooks like it explains all of the codependency issues. FATCA is what they have been waiting for.
https://www.facebook.com/photo.php?fbid=188340978016372&set=a.188339741349829.1073741827.187406564776480&type=1&theater
Repubs Overseas
A RNC Resolution on FATCA’s unintended consequences for overseas Americans could help to stop more countries to sign the intergovernmental agreement with the U.S. Treasury in order to implement the Act. When one of two U.S. national politic…al parties would take a stand on repealing FATCA’s negative impact on American citizens abroad, it could give those foreign counties a good reason to pause. So far only nine countries has signed the agreement. FATCA will be impossible to enforce without a large number of countries to sign the agreement according to the Washington Time’s article.
http://www.washingtontimes.com/news/2013/oct/28/rahn-looking-for-lucre-in-all-the-wrong-places/
The vast majority of people here are left winger. During the partial government shutdown FACTA was not being negotiated. Do these people support a partial government shutdown so FACTA can not be negotiated and may be delayed until the 2014 elections.
@GeorgeIII,
I don’t understand your question.
FATCA just gets more and more complex and convoluted. I don’t understand all this, but I do note that Treasury is asking for rule work around suggestions from ISDA
The North American Tax Committee of the International Swaps and Derivatives Association (ISDA) has provided follow-up comments in response to Treasury and IRS requesting them to:…
Read more here…
http://www.fsitaxposts.com/2013/11/23/isda-fatca-comment-letter-lldie-collateral-arrangements/
Of course it is layered up with acronyms to be sure most average people don’t have a clue what they are talking about…
@calgary411, I love the fact that poorer countries like India and South Africa are more compliant than the US in the OECD’s list.
I also love the phrase “in place, but”. But what? But what?
Has anyone attempted to write to the OECD on the issue of CBT. They want partner countries to follow a “global norm” with regards to taxation. CBt is anything but.
@Marie, do you really think the US would listen or care? If anything they’d encourage the others to follow THEIR example.
“I don’t know what effect the Tax Treaty has with respect to the application of FATCA on Canadian soil. No doubt that is something being raised by Flaherty and his officials even now. Bear in mind, however, that the only real financial cost that can be imposed on you for failure to comply with FATCA, as far as I can tell, is a 30% withholding of certain transactions ARISING FROM US-SOURCE INVESTMENTS. Do you have US source investments? How important are they to you? Can you unload them and re-invest the funds in Canada instead, before FATCA comes into play? Think about it.”
http://isaacbrocksociety.ca/2012/02/13/3200/comment-page-2/#comments
Schubert1975 is this statement still accurate?
FACTANEVER,
Why do you keep changing who you are?
Marie,
This asks for TECHNICAL changes, but perhaps someone could ask about ‘OECD wanting partner countries to follow a ‘global norm’ with regards to taxation, which US CBT is not.’ Someone less confused by all these policies than me. OECD invites public comments on a discussion draft on technical changes to be included in the next update to the Model Tax Convention
@Medea, you’re likely correct. But, other countries could try.
@Medea. You are right. They would not care. However, all we can do now is pressure our government(s) and raise awareness.
@Calgary411. Thank you for the link. I think it’s worth contacting them with our concerns.
I think this is a recent change in the TD bank FATCA page?
TD says:
“TD is committed to providing impacted customers with support and information to ensure they receive a comfortable experience once the law comes into effect.”
http://www.tdcanadatrust.com/customer-service/overview/fatca.jsp
So tell me, how exactly could any impacted customers receive a ‘COMFORTABLE’ experience at TD under FATCA”?
As TD abrogating our Canadian Charter rights, and treating their Canadian citizens and tax resident clients and their legal local savings as if they are moneylaunderingcriminals at the behest of the US could ever be a ‘comfortable’ ‘experience’. It’s enough to make one vomit.
And, note, it says ‘once the law comes into effect’ – as an inevitability.
This page also is worded as if FATCA is already law, and certain to apply to Canadian banks.
If I was a TD client, I’d pull my accounts at the sheer insult of the BS offered up that while giving them the use of your legal hard earned assets, they consider being forced to prove your nationality to be an experience that could ever be described as ‘comfortable’.
What disgusting BS.
@badger
The TD bank is really more American than Canadian. There are more branches in the USA than in Canada. I would never have them as my bank.
@badger
“Comfortable” as when the dentist says, “I’ll make this as comfortable as possible”.
How come a student can figure it out, but no government can?
http://www.swedishbankers.se/…/U…/$file/UppsatsFATCA.pdf
The last paragraphs give her conclusions.
Run it through a translator, Swedish to ENglish
@Mark Twain
I tried…will not translate error comes up.
Can you put the last few paragraphs up here on Brock?
You’re right about TD @northernstar. And I certainly will be telling any TD accountholders I know about FATCA, urge them to switch to a credit union – and also underscore that the TD has an essential conflict of interest; it is more a US bank than a Canadian one (not that the other CBA members are any better, they just have fewer US branches currently, though US expansion is a common aim).