The report has been released as of May, 2013. I didn’t read most of it but scanned through until it came to the section on FATCA (Chapter 4, Tax Collection Agencies and the Exchange of Tax Information).
I am reproducing the entire section; emphases are mine:
U.S. Foreign Account Tax Compliance Act
In their appearance before the Committee, some witnesses discussed the U.S. Foreign Account Tax Compliance Act (FATCA), which came into force on March 18, 2010. The FATCA requires foreign banks to disclose annually, to the IRS, the names of all American account holders, or a 30% withholding tax will be applied on all U.S. income earned by the institution or by an account holder. The Canadian Bankers Association stated that, with the FATCA, the United States is trying to bypass the exchange of information between the IRS and foreign tax authorities and, instead, to get information directly from foreign financial institutions. In its view, this approach could create problems because of conflicts between Canadian privacy legislation and the FATCA.
As well, a number of witnesses said that the size of the U.S. economy and the amount of money invested in the United States by non-resident individuals has allowed the United States to have some success with reporting requirements in respect of foreign accounts. While Arthur Cockfield suggested that Canada should pursue mandatory bank account reporting requirements for foreign financial institutions operating in Canada, David Sohmer thought that this measure would be much more difficult for the Canadian government to pursue due to the relatively small size of the Canadian economy and the importance of foreign investment in Canada. Robert Kepes advocated an examination of the implementation of a FATCA-like regime for foreign financial institutions that operate in Canada, while Global Financial Integrity indicated that Canada should implement its own version of FATCA in order to prevent cross-border tax evasion by individuals. The Tax Justice Network requested a FATCA-like regime that would apply to foreign branches of Canadian banks and would require such branches to submit financial information in relation to Canadian account holders to the CRA or risk losing the right to operate in Canada. Finally, in order to promote the exchange of taxpayer information, Arthur Cockfield advocated incentives that would induce tax havens and offshore financial centres.
While I am not surprised, I did hope there might be some mention of how badly FATCA will affect certain Canadian citizens and perhaps a hint of whether or not Canada would actually sign on to FATCA/IGA. There is nothing in the recommendations to indicate any approach to FATCA. The focus seems to be totally on the ineffectiveness of bilateral agreements/TIEA’s and that the move should be toward automatic information exchange.
Considering all the grief Brockers have to deal with when trying to come into compliance, Scot Michael outlined some key points that the Voluntary Disclosure Program of CRA should include. Imagine how much better we would all feel if the US approach were more like this.
*amnesty from criminal prosecution,
*penalties proportional to the offence
* no penalties for non-resident individuals who pay foreign income tax
* timely resolution of cases
* random checks of amended returns in order to ensure compliance
* aggressive enforcement of tax law
Both the NDP and the Liberals added sections with recommendations of their own; none would seem to directly affect our situation. Perhaps Tim could outline what happens with these reports and whether or not they have much influence on future government decisions.
