A U.S. law aimed at cracking down on tax evasion by expatriates has collectively cost Canada’s five biggest banks about 750 million Canadian dollars (US$693.5 million) in initial compliance expenses, according to people familiar with the matter.
Read more here: http://online.wsj.com/articles/canada-banks-tally-their-tax-compliance-tab-1406504252?mod=WSJ_Opinion_LatestHeadlines
Hint: if you have trouble viewing this article, try cutting and pasting the headline into a Google search.
i.e., If anyone cannot get past the log in / subscription page: go to GOOGLE NEWS; in the search box there, insert Canada Banks Tally Their Tax-Compliance Tab.
Using Chrome, I find that I can get directly into the WSJ article directly once, but not subsequent tries. If I clear cache, close Chrome, and restart Chrome, I get by the paywall.
Since people seem to be having difficulty viewing and commenting at the WSJ article, I added the following 3 comments (no one else has commented so far):
Canadian banks made a fatal error, deciding to spend money supporting compliance of US law, versus defending Canadian sovereignty and Canadian privacy rights. And the Conservative government made an even bigger error, succumbing to the cries of so-called ‘Canadian banks’ instead of listening to the pleas of Canadians.
The battle line has been drawn.The Canadian government has proven it supports American interests, and Canadian banks invested in America, over the rights of ALL Canadians
Are you married to someone who was born in USA? It doesn’t matter if your US born spouse has no economic connection to USA, or if they left in diapers. Canadian banks will send YOUR joint banking information to CRA, which will in turn pass it off to the IRS.
Even if you have no US connection you should be very afraid, because the Canadian government has proven it has no accountability to its citizens.
Does anyone really believe that Canada is a sovereign nation anymore?
Mr. Stack says: “Over the past several years, FATCA has become the global standard in combatting international tax evasion and promoting transparency,”
FATCA is a 1-way information flow to the USA, enforced under threat of economic sanctions, with a vague promise from Treasury to work towards reciprocity in future. And even if FATCA was 100% reciprocal, since USA is the ONLY developed country in the world that taxes people who live permanently outside USA on income earned outside USA, other countries have much less to gain from a reciprocal agreement.
There is a huge uproar from Canadian citizens living permanently in Canada with no economic ties to USA, who are deemed by USA as ‘US persons’ and are thus subject to FATCA reporting on their local (not foreign) accounts. If FATCA applied ONLY to ‘US persons’ living INSIDE the USA, there would be no outcry from Canadian citizens.
FATCA has revealed USA’s dirty little secret – ‘citizenship based taxation’ where citizenship has nothing to do with patriotism, economic connection, or residential status. An accident of birth makes one a US citizen and thus a US taxpayer even if one left USA as a young child never to return. This is a human rights violation as it implies that USA has property rights in people simply based on an accident of birth.
Most of the estimated 6-7 million ‘US persons’ living permanently OUTSIDE USA, have been unaware of USA’s unique to the world ‘citizenship based’ taxation law, and have been unaware they are required to report their so-called ‘foreign’ bank accounts (held locally) on annual reports called Foreign Bank Account Reports (FBARs) to the Financial Crimes Enforcement Network (Fincen).
FATCA will reveal these locally held, already taxed, legally earned monies, and will result in bankrupting penalties being assessed on people whose only crime was birth on US soil.
Here is an interesting idea. Can we get ADCS funding from the financial institutions? It could be a point of a bank wrapping themselves in the Canadian flag while portraying other banks as wrapped in the American flag. If a bank pulls this off it could be a huge PR coup for that bank.
Is ADCS open to such funding source to elevate them from their grassroots challenge. It still could be controlled by the grassroots, and this should be a point of insistence.
Why wouldn’t a bank give a significant sum to ADCS? Of course there is the money, yet compared to FATCA compliance cost and the welcoming of USG to add to those costs unopposed at any time in the future, a small sum to support ADCS would be trivial (yet could be quite big for ADCS).
They might get singled out by the US. If they are compliant then they should not be. They might have a “foot in each pond.”
Other banks will not like them. Especially, if they take customers from them.
The Canadian Government may not like them – supporting a legal case against the government. The government has legal cases against them all the time. Plus there will be supporters in Parliament for this.
What if it all succeeds well and FATCA gets overturned. Do we really think that the US will shut the Canadian financial system down? What a bully! Canada can say the plan was ill conceived from the start trampling on privacy, discrimination, and human rights laws. Then the government should pursue legal action against the U.S. to overturn the laws and for compensation for damages, And, Canada should insist that FATCA be reviewed by the U.S. Senate.
@JC re: “Why wouldn’t a bank give a significant sum to ADCS?”
Typically one side of the battlefield does not provide ammunition to the other. Canadian banks already made it very clear which side of the battle they are fighting, and its not ours.
@Whitecat The way things may work in politics is that for a large company they may donate to both sides.
Re: the banks not on our side. They are not on the other side as well. Their customer base is in Canada so which side do we think they will naturally tend to side with Canadians or Americans?
The Canadian banks, like banks around the world, were forced to sign up for FATCA by their governments (they had a gun pointed at their head). For them perhaps as all banks are impacted equally then this lowers their opposition.
ADCS needs funds. Why not reach out? FATCA does not require no opposition out of FFI. I’d say the idea is good.
@WhiteKat & JC
Circular firing squad comes to mind.
REST IN PEACE AND FREEDOM
CANNINE ANTI FATCA FRIEND OF FREEDOM
@Whitekat Thank you for posting those comments. You really put it in words perfectly..
Take a look at this… breaks ALL the Canadian Fatca regulations, they even ask you to sign a “release” form! ….https://www.mscu.com/Banking/FATCAMemberInformation/ and this is the Mennonite credit union!
WOW, they sure have got it all wrong. I live out in a heavily populated Mennonite area. They often marry with those in the US, I imagine because the varying sects are rather small and they try to keep true and marry within their belief subsets. They are also a VERY tight community. I just can’t imagine them rolling over on one of their members and wondered how they were going to handle this. Often pastors are heads of the smaller credit unions, talk about KYC! If anything I just assumed they would err on the side of turning a blind eye! They do not appreciate government/non-Mennonites being involved in their lives…many will not even accept OHIP and the church pays their medical expenses. This is rather mind boggling.
If this information page from the Mennonite credit union was the first thing I ever read about FATCA, I’d think I was hallucinating being in Nazi Germany! I thought I was pretty hardened, but that gave me major anxiety.
The CRA’s FAQ’s on FATCA:
If you are saying what I think you’re saying, that you have lost your beloved dog anti-FATCA friend, my thoughts are with you, Chears. (Mine is my link to the real world we’ve lost track of — dogs and walks and river plays and reality.)
A real non-judgmental therapy that we’re OK even with all we’re going through; we’re lucky to have such loyal companions and I know yours will be sorely missed. Stay strong; be well.
I wonder if Canadian bank’s shareholders were asked about FATCA:
“August 1, 2014 – Ottawa, Ontario – Department of Finance
Finance Minister Joe Oliver today launched a public consultation on a key element of the Government’s comprehensive risk management framework for Canada’s domestic systemically important banks. The proposed regime is aimed at ensuring:
that taxpayers are protected from having to bail out a systemically important bank in the highly unlikely event of such an institution running into difficulty; and,
that Canada’s financial system remains strong by clarifying that banks’ shareholders and creditors are responsible for bearing losses, thereby giving them stronger incentives to monitor the bank’s risk-taking activities.”
I suggest to send the bill to the IRS for special services rendered. That goes for all other banks outside of the US as well. Don’t forget the VAT!