The exact text is:
NEGOTIATION OF AN INFORMATION EXCHANGE AGREEMENT WITH THE UNITED STATES
November 8, 2012
Negotiations are being held between Canada and the United States on an agreement to improve cross-border tax compliance through enhanced information exchange under the Canada-United States Tax Convention, including information exchange in support of the provisions enacted by the United States commonly known as the Foreign Account Tax Compliance Act (FATCA).
The purpose of this bulletin is to inform persons whose interests are affected by the provisions of FATCA that the Government is actively seeking a solution to issues raised by such provisions. The Government of Canada has received input from many individuals and groups in relation to the implications of FATCA.
Persons wishing to offer additional comments concerning the negotiations may send their views to:
Department of Finance
17th Floor, East Tower
140 O’Connor Street
Ottawa, Canada
K1A 0G5For further information contact:
Kevin Shoom
Business Income Tax Division
613-992-2980
I strongly suggest that the Isaac Brock Society make a formal submission. I am happy to volunteer my contribution to this – and I hope others will too. I note the following comment on this topic by Jim Jatras.
Canada seeks public input into #FATCA negotiations with Form Nation http://t.co/N5sejiu7
— U.S. Citizen Abroad (@USCitizenAbroad) November 8, 2012
@Christophe
According to Professor Harvey at the George Mason seminar, the reason they want full accountg balance and not just income, is the concern (so they claim) that Americans might be hiding income derived abroad in foreign accounts and not reporting. So not just the interest would be taxable but the principal too.
BTW, did you get the PDF of the Geithner response to Sen. Paul?
@Jim Jatras. Thanks. I got the PDF.
@Christophe
Tres bon. Do you know how to post it?
@Jim Jatras,
So, are they planning on looking at account balances from one year to the next, and comparing any changes between the two, to income declared that year? How else could they tell if one was hiding “undeclared” money. The implications for possible screw ups are horrendous, when you think about the difficulty they have handling the paperwork now. Definately time to renounce ASAP
@Petros, can we add a link, maybe in External resources to that document?
*The term “renounce” is becoming very popular, especially in Singapore, the Philippines, USA and Canada:
http://www.google.com/trends/explore#q=renounce&cmpt=q
FATCA is becoming very popular too, mainly in Switzerland, Singapore and Hong Kong:
http://www.google.com/trends/explore#q=fatca&cmpt=q
FBAR is the hit in India: http://www.google.com/trends/explore#q=fbar&cmpt=q
Immigration USA is on decline: http://www.google.com/trends/explore#q=immigration%20usa&cmpt=q
@CanuckDoc
Re: “So, are they planning on looking at account balances from one year to the next, and comparing any changes between the two, to income declared that year? How else could they tell if one was hiding “undeclared” money.”
So it would seem.
On the question of renunciation, that would be each individual’s call. However, if Canada does finalize an IGA with the U.S., the enforcement of Canadian FATCA-like requirements on all institutions, whether they hold American assets or not, would be a significant burden that will affect everyone.
Done my submission, short and sweet <3 pages. Highlights include a request that priorities are given to citizens over business entities and practitioners, how the Canadian government is being irresponsible if it pursues an IGA when many in Congress itself question FATCA’s benefit/damage (with a link to Rep Reichert’s letter to Schulman), a plug for Jim Jatras on the dangers of IGA’s and how to kill FATCA, and how the Canadian government should not rush into anything until the general public has been educated about FATCA. Next, a phone call to Mr Shoom and the mail box.
Oh yes, and a cc to John Weston.
Please explain what the title 26 and title 21 discussion is about. Are those paragraphs within the tax treaty with Can?
Please explain the basis about why 8938 would not be categorized as a tax issue.
I’m mailing off my submission right now. I hope it counts for something.
I will certainly submit a response, but I am going to mull over just what approach to take. It seems to me that possible responses come down to two alternatives: a) oppose any IGA at all, or b) indicate what provisions must (and which must not) be included in any IGA. I am inclined to a), however on that question the horse has already left the barn.
Sorry, in error posted on wrong thread – ideas for submissions:
https://isaacbrocksociety.ca/2012/11/08/letter-from-flaherty/comment-page-1/#comment-86676
Suggestions welcome.
Where’s the Canadian media on this?
@bubblebustin
Re: “a plug for Jim Jatras on the dangers of IGA’s and how to kill FATCA” — mucho apreciado. Can you share your three page submission?
@NorthernShrike
Re: “however on that question the horse has already left the barn.” Are we sure about that? It seems there must be a reason they’ve been so quiet about it up til now. Maybe with enough noise, they would have to reconsider?
Well, maybe not.
@Badger
The issue is what it is and NOT where it is found. FBAR and other information returns cannot be reasonably construed to be tax penalties. They are penalties for failing to file returns regardless of whether there is a tax penalty or whether tax is owing.
The fact that FBAR is in title 31 is evidence that it is not a tax penalty but is not conclusive. Similarly one could have an information return penalty in title 26 (Example 5471, 3520, 3520A, etc.) that are not tax penalties even though they are in title 26.
If the Title number determined whether something was a tax, then the US could generate endless revenue by just putting a number of revenue raising measures in title 26.
@MarkTwain
Title 26 is the part of US laws that includes the Internal Revenue Code.
Title 31 is the the part of US laws that includes the Bank Secrecy Act
In other words the title numbers are how the US designates its laws.
As far as why this matters, see above.
Thanks renounce. Just when I think I’ve got a grasp of some of this, it slips away.
@Jim Jatras
Considering our Conservative government’s penchant for passing legislation without taxpayer’s input, I would say this is important to them. It should come as no surprise, really, that they may have been negotiating for some time, but define “negotiate”, will you?
I’ll post my references to you, which are excerpts from what you have written on Brock in case I made an error you would like to correct before I mail it. I referenced your email address at the end of my letter.
There is a growing consensus that in the absence of
Intergovernmental Agreements, FATCA on its own would be unenforceable. James
Jatras is a US attorney with Squire Sanders, a Washington DC public advocacy firm
and an expert on FATCA who has developed a comprehensive plan to repeal it. He
warns against countries entering into IGA’s with the United States:
“IGAs (intergovernmental agreements) are essential for the US to implement
what would otherwise be an unenforceable regime. No one pretended that
FATCA could be successfully enforced solely as a unlilateral and direct U.S.
imposition. Either Washington will be successful in pressuring
or tricking other countries into enforcing FATCA on themselves, or
the whole scheme collapses.”
He further suggests:
•
Governments (including Canada’s) must tell
Washington in no uncertain terms they will not enter into any IGA on FATCA, nor
will they allow extraterritorial penalization of their domestic firms, for
which retaliatory steps will be imposed; and
•
Industry (including Canadian firms and
associations) need to divert a small fraction of the funds they have been
expending on, in effect, making FATCA more minimally tolerable but achievable
and instead put some relatively small investment into repeal.
Wow, Bubblebustin — almost 3 pages! I’ve only got 3 paragraphs of “input” so far but I’m still working on it. Does it have to be mailed (we’re currently snowbound) or can we use Shoom’s e-mail (kevin.shoom@fin.gc.ca)? I don’t know how much time they are giving for submissions but I think an immediate bolus of “input” would be more effective than a slow drip so I’m joining the IBS deluge as quick as I can. I am definitely taking the track of do NOT negotiate any IGA with the USA because the current tax treaty is more than enough (actually more than the USA deserves). I’d like them to say take your FATCA and shove it but I’ll conjure up some Canadian politeness and word that better.
@Em
Maybe mine’s not as original as yours as I use a few quotes. You should do as Tim suggested and call Kevin Shoom and ask if you can email yours, considering you are unable use snail mail. I don’t know what kind of time constraints we have, but I would guess asap would be better in achieving the ‘bomb’ effect 🙂
Oh you poor Canadians. You are always seen as the relief valve for all U.S. discontent. Little do they know! 🙂
Fox station tells Romney supporters how to ‘beat the traffic’ to Canada
Credit where it’s due — at least the government is asking for comments and input into this. This government hasn’t always done that.
For those interested, the link to the official announcement is here
http://www.fin.gc.ca/treaties-conventions/notices/unitedstates-etatsunis-eng.asp
Note that they acknowledge they’ve already received comments from individuals (including me, multiple times) and groups/organizations and are inviting “additional comments.” I’ve already shot my bolt on this, both with the Finance Minister and the opposition parties and my own MP, so I’m not replying further on this, but I’m glad to see they’re inviting further comments from those who haven’t come forward yet.
Interesting that there is no deadline for providing comments. I’m not sure quite how to interpret that. One interpretation is this is a pro-forma exercise to be able to say “see we invited public input.” Another interpretation is they don’t have a clue when this is going to be concluded, think it may take a while, and don’t want to tie their hands in public to closing off discussions (and being subject to further US pressure to “get a move on”) prematurely. Another interpretation is they’re now very aware this is a hot potato and are going to tread carefully with this issue. No doubt there are other interpretations possible.
Take your pick, depending on your level of paranoia.
@bubblebustin
Many thanks.
Re “Considering our Conservative government’s penchant for passing legislation without taxpayer’s input, I would say this is important to them. It should come as no surprise, really, that they may have been negotiating for some time, but define “negotiate”, will you?”
Unfortunately, I don’t think we need to think real hard what “negotiate” means in this context, along the lines of discussing what kind of sauce would you like to be eaten with.
Re the Conservatives’ penchant for not consulting the taxpayers, I was not aware of this. Aren’t they also a bit toward the reflexively pro-American tendency? Isn’t there anyone on the side of the opposition who might be inclined to use FATCA as club to beat the Government for planning a sellout to Washington?
You are absolutely right with that question, bubblebustin!!
Where is the Canadian media? What are they afraid of? Are they being gagged?
(For what it’s worth, many of my comments have been moderated into the abysss of Canadian media. I’ve actually gotten better, more honest conversation with US media and author, Amanda Klekowski von Koppenfels, Ph.D., University of Kent, Brussels. Admittedly, it is said that it is because I don’t want to put myself and my son’s situation out for whatever consequences — so, yes, my paranoia does me in.)
@all- The only solution to this problem is to be found by a clear rejection of “citizenship based taxation”. At least that is what my submission basically says. As far as I can see FATCA only makes a bad situation worse.
The way forward is for the U.S.to be disabused of its belief that it is entitled to special treatment that allows it to violate the sovereignty of other nations. A person can come to this issue from many angles but in the end no matter which perspective you chose to use there is no way around this problem that permits citizenship based taxation to stand.
If citizenship based taxation dies so does FATCA.
@Jim Jatras
@Jim
I don’t think that Harper is really fond of Obama on account of Keystone and his Keynesian spending habits. The NDP are all over the Conservatives re FATCA, but have been silent on castigating them which makes me believe both parties are on the same side (surely the opposition wouldn’t miss an opportunity to grill them over it). I’m sure the Harper government knows that as soon as this hits the Canadian media, they will to be accused of trying to sell Canada out again, which may be a misconception since they haven’t done so (yet). Conservatives will have to play this carefully. Could be totally wrong, just my impression.