He said he believes pressure needs to come from the U.S. to get the Canadian government to respond.
“This has to be fixed at a very high level,” Fontaine said. “Right now, companies are effectively forced to deal with the bureaucrats to get treaty benefits to effectively apply. It slows everything to a crawl.”
Sinclair said her “best guess” as to why the CRA seems to have changed its waiver approval process is that it is considering a new test to determine whether employees are exempt under the treaty.
The CRA’s Brideau told Bloomberg BNA on Nov. 27 that the agency “is not currently working on developing such a test.”
Ronald Nobrega, a partner in the Toronto office of business law firm Fasken Martineau DuMoulin LLP, said dealing with the CRA can be a guessing game.
“You never know quite what they’re going to ask,” he said. “The guidelines are out of date. Compliance can be burdensome and costly.”
Laher said Canada’s reputation as a valued location for business meetings and executive conferences may be changing because of the snarls surrounding the withholding rules.
“Canada’s not becoming the location of choice,” Laher said. “As a proud Canadian, I don’t like that.”
Does American exceptional hypocrisy ooze or drip or both? Good comments there by calgary411 and Jeff Sheldrake. I’m probably not a good one to be commenting on this one though. I’d be inclined to say, “Poor little US companies. Can’t take Canadian bureaucracy and Canadian withholding but sure don’t mind a bit when it’s the IRS dishing dirt on US persons living in Canada.” This needs the deployment of Wonder Badger Woman’s lasso.
Maybe when they whine they could whine about us filing FBARs
If this is a response to the US extra extraterritorial-ism then I say keep on dragging it out Oh Canadian bureaucrats. Good application of the “Yes, Minister” skill set. Indeed all British Commonwealth Civil Servants should be pretty excellent at this sort of (deniable) retaliatory action.
Sometimes retaliation is best served up in small, faucet-dripping actions or at the speed of paint drying.
Hard to miss the message from the CRA on this one.
I’m not registered with Disqus (accidentally registered once, I think, but I managed to get out of it) so I can’t comment at Bloomberg (they need a guest option) but I did some venting and wrote what I would have said if I could have …
I have as much sympathy for US companies experiencing some Canadian passive -aggressive bureaucratic waiver waffling as the US Congress and the IRS have displayed for the 7 million US “persons” living “overseas” whose privacy and financial well-being are under attack because of American FATCA legislation. I do so hope that stealth orders were given by my Canadian government to slow down the withholding waiver process in retaliation for FATCA. Nobody would admit to that of course but it would be quite an appropriate reaction, in my opinion.
The irony here is that the US companies feel their bottom lines are being affected by Canadian actions but what they fail to realize is that their bottom lines will eventually be affected by the American FATCA regime — and more so. They just don’t know it yet because as James Jatras (repealfatca dot com) says, “FATCA is the worst law most Americans have never heard of.” Thanks to US citizenship-based taxation (unique to the USA) which is soon to be enforced by FATCA, Americans are fast becoming personae non gratae whenever they step beyond their borders. Foreign banks will not want them as clients. Foreign based companies will not want to hire them. All due to their burdensome US tax baggage.
FATCA was an oh so typical American overreaction to some “fatcats” avoiding some US taxes with overseas accounts. The high priced experts at the disposal of these “fatcats” will no doubt have already devised work arounds to FATCA. That leaves 7 million US “persons” who live outside the USA, an unknown number of US immigrants and every financial institution in the world paying the price for FATCA. US companies trying to operate overseas will pay the price too. And what is the US government’s big stick to force FATCA compliance worldwide? It is a draconian 30% withholding penalty to be levied on any foreign financial institution which can’t prove it is 100% FATCA compliant. The Canadian withholding maneuver pales in comparison. May the “snags” and “inappropriate solutions” continue, I say.
Should anger a lot of Canadians too. My husband has remarked that the permitting process has been slowed down too, which can hurt a lot of Canadian businesses. Often times the projects coming to Canada are contingent on specific foreign personnel receiving permits and waivers in a timely fashion. It this gets out of hand, projects will surely go elsewhere.