When: Today, Wednesday, May 7 at 1:45 pm
Where: Ottawa Centre Block
Author Archives: Tim
Is the IGA about protecting Canadian Banks “regular” operations or is it about protecting their casino/derivatives business?
There was interesting comment by Finance Dept official Brian Ernewein at the very end of last Thursday hearing. At the very end he seemed to indicate that the FATCA 30% withholding would NOT have a significant impact on “regular” or “cash” market operations of Canadian banks but WOULD have significant impacts on Canadian banks cross border “Casino” Over the Counter Derivatives business. This is a rather interesting thing to say as Over the Counter Derivatives were largely viewed as causing the last financial financial crisis and I wonder what exactly is the Canadian public policy benefit to allow chartered banks to engage in OTC Derivatives trading with clients resident in the US/outside of Canada.
Any thoughts?
Latest from Carl Levin on Russia and FATCA
Levin, McCain call for U.S. to refrain from FATCA negotiations with Russia
Without agreement, Russian banks face 30 percent tax on U.S. investments
Tuesday, April 29, 2014
WASHINGTON – Sens. Carl Levin, D-Mich., and John McCain, R-Ariz., today urged the Obama administration to continue to refrain from further negotiations with Russia on compliance with the Foreign Account Tax Compliance Act until Russia ends its aggressive and destabilizing actions toward Ukraine.
Kevin Shoom testifies before Senate National Finance Committee on Tuesday on FATCA. Bankers come Wednesday
My advice I would get moving on submissions this weekend. I did talk to the committee clerk who said there is no formal deadline but the sooner the better will be better for them.
2. Subject-matter of Bill C-31, An Act to implement certain provisions of the budget tabled in Parliament on February 11, 2014 and other measures. Part 5 (Clauses 99 to 101)(FATCA)
Witnesses
Department of Finance Canada
– Brian Ernewein, General Director, Tax Policy Branch
– Kevin Shoom, Senior Chief, International Taxation and Special Projects
– Ted Cook, Senior Legislative Chief, Tax Legislation
Pro FATCA/CBT Young Turk “The Jerk” tells “middle class and poor” Americans to move “to Canada” WTF!!!
Is this guy a moron or what. So he wants ALL middle class Americans to move to Canada which in turn will make them subject to FATCA which will somehow even out income levels.
https://www.youtube.com/watch?v=nLfurFpZHFU
Young Turk also talks about Canada having “better” policies. Yeah like Residence based taxation.
IRS says it’s “OK” to own PFIC’s through a “US” tax deferred account
No mention of other countries tax favored accounts although I have to wonder would Canadian RRSP’s be considered a recognized “US” favored account.
Latest from New Zealand Privacy Commissioner on FATCA
What would happen if New Zealand didn’t pass a law to allow FATCA reporting?
If there was no change to New Zealand law, financial institutions in this country would, unless certain exceptions applied, have to pay a 30 percent withholding tax on certain US income. This financial cost would undoubtedly be passed on to a broad range of New Zealand consumers.
Most New Zealand banks receive some US income. For instance, US Treasury bonds play an important role in setting global interest rates, and are often used by banks to reduce their exposure to interest rate risk.
If New Zealand did not pass a law to allow FATCA reporting, banks and other financial institutions in this country may be unable to comply with FATCA without breaching the privacy principles relating to the collection and disclosure of client information.
If New Zealand did not negotiate an IGA with the US, the effect on American citizens and green card holders resident in New Zealand would be that it would be easier for them to avoid meeting their obligations to pay tax in the United States. [Why should New Zealand care about this?]
However, a significant portion of these tax obligations can be discounted by tax paid in New Zealand under the US-New Zealand double taxation agreement.
For these reasons, the Privacy Commissioner has not opposed the negotiation of the FATCA IGA with the US, and the amending tax law to implement the IGA.
Will information about New Zealanders with no US connection be sent to the US?
No. Only those accounts covered by the terms of the IGA can be sent to the IRS. Financial institutions have to collect information on accounts that look like they might belong to a US person, in accordance with a set of criteria.
In the 2013 New Zealand Census, 21,462 people indicated they were born in the US. This is an indication of the number of people potentially affected, as birthplace is one of the IRS criteria.
Parliamentary Finance Committee Chair and Conservative MP James Rajotte on #FATCA
http://www.jamesrajottemp.ca/issues/finance-and-taxation/offshore-voluntary-disclosure-initiative
Some constituents have expressed concern regarding the U.S. Internal Revenue Service’s Offshore Voluntary Disclosure Initiative. This is exclusively a U.S. program, with the federal Canadian Government playing no part in its creation or execution.
I appreciate that many individuals are frustrated to learn that they can face penalties for previously undisclosed foreign accounts and assets. The U.S. government requires its citizens, even those living abroad, to file income tax returns and associated tax forms – even if those U.S. citizens do not have to pay any U.S. income tax because they already pay Canadian income tax, and even if they have dual citizenship with Canada. This requirement has been in place since 1913.
It is unfortunate that the U.S. maintains this requirement as most other industrialized nations have moved away from this specific measure. However, it is entirely within the purview of the U.S. government to impose such a requirement.
While it is within the U.S. government’s authority to do this, it is not good policy in my view. That is why I have directly raised the concerns of many constituents of Edmonton-Leduc like you regarding the Offshore Voluntary Disclosure Initiative with the Honourable Jim Flaherty, Minister of Finance.
Minister Flaherty has been in constant contact with his U.S. counterparts, pressuring them to understand fully their actions against Canadian residents. Below is a letter from Minister Flaherty submitted to several American papers expressing concerns on FATCA/FBAR.
– See more at: http://www.jamesrajottemp.ca/issues/finance-and-taxation/offshore-voluntary-disclosure-initiative#sthash.saRd7CJc.dpuf
Overdue repost for old times sake: Obama FATCA Video
I thought for old times sake we were overdue for a repost of US President Obama’s official announcement of support for FATCA in 2009. I know many newcomers have not yet seen this video so I thought this might be a good time to re-post
It starts at around just the 16:00 minute mark. I am currently working on trying to get a video clip of just Obama notwithstanding the earlier part of the video with John Richardson’s great presentation.
https://www.youtube.com/watch?v=xZhcsiuyDuc
“Big Scandal”: Quebec politician had “offshore” bank account while not living in Canada
Just so we don’t get too smug among ourselves here in Canada I wanted to post this late breaking story.
Liberal Leader Philippe Couillard put $600,000 he earned in the 1990s in an offshore bank account in the Channel Islands, reveals a report by Radio-Canada’s investigative team Enquête.
Couillard worked in Saudi Arabia between 1992 and 1996, setting up a neurosurgery clinic.
He stated publicly this week that he had money in an offshore account between 1992 and 2000.
Couillard did not pay Canadian taxes on the money, which is perfectly legal as he had severed all ties with Canada at the time.
“In Saudi, like all people who are there, I was a non-resident. So I put my assets at the time in a foreign bank and when I returned, I transferred the money back home,” Couillard said Tuesday.
A spokesperson for the Liberal leader told Enquête today that Couillard declared the revenue from the interest on the money and paid taxes as required by law, and also added that Couillard chose Jersey because that particular bank had links to a Canadian bank.
