Canada signs FATCA treaty
 

http://globalnews.ca/news/1130967/ca...atca-tax-deal/

So basically, if you're a US citizen or LPR and in Canada (determined according to the terms of the agreement), you have to comply with US tax reporting obligations including FATCA, else you get hit with a 30% withholding tax. And if the banks don't comply, all their US investments get hit with a 30% withholding tax.

Re: Canada signs FATCA treaty
 

I presume this means US citizens in Canada will no longer be able to get bank accounts; that seems to be what's happening in other countries that have signed up to this nonsense.

Re: Canada signs FATCA treaty
 

From the article:
So I understand that the Canadian bank would probably have a record of where a self-identifying Canadian--who was also a secret American by birth--was born. Under this new agreement, this would raise a flag, and be an "indicator" of American citizenship, and so trigger the Canadian bank to report said Canadian to the IRS.

But... what if the Canadian had a parent who is American? How would the bank know this? Not all children of Americans born outside the US are USCs....

My question is, could a self-identifying Canadian born in Canada who may possibly be American by descent but who never understood the fact be easily found out as American? There must be a number of people in this situation....

Re: Canada signs FATCA treaty
 

Yep this is a good question. Foreign banks can't be expected to become experts in US citizenship law and correctly identify every single US citizen customer. However, I don't think it's going to be a big concern since they'll probably take a "good enough" approach by simply asking the question directly and/or asking to see a passport. Not foolproof but probably good enough to identify the vast majority.

There are a few more worrying aspects to this whole thing:

- The arrogance of the US in thinking it can simply impose its laws on the rest of the world. Some countries may refuse to comply.
- The fact that foreign banks are going to have to spend money on something they get no benefit from.
- The overall cost to the foreign banks far outweighs the financial benefit to the US i.e. foreign banks will spend more implementing this than the US will receive in tax revenue.
- It's going to hurt the ability of US citizens and companies to do business abroad.

Re: Canada signs FATCA treaty
 

I hope the IRS finds my nearly always empty bank account amusing....Rarely is there money it in, just on pay day for a few hours before I go online and pay all the bills, then poof an empty bank account again.

Re: Canada signs FATCA treaty
 

I believe the fundamental issue is that America is the only developed nation which claims the right to collect income tax from citizens who don't live there. This is why the number of Americans renouncing their citizenship has been rising rapidly over the last couple of decades.

Given the costs of submitting a tax return when you've lived out of America for twenty years, and the difficulties of trying to get a bank account when banks don't want the hassle of dealing with you, I can only presume that number is about to explode.

Re: Canada signs FATCA treaty
 

Unless wealthy and have a complicated taxes, the IRS forms are fairly simple to fill out and understand, and only cost is postage.

Re: Canada signs FATCA treaty
 

Even when they don't live in America?

I've seen a number of Americans who work in ordinary everyday jobs in other countries complaining about the cost of getting someone to do their US tax return for them, merely to prove they don't need to pay any taxes.

Re: Canada signs FATCA treaty
 

I am in Canada and I figured at first I had to pay someone to do it, then I read the IRS website and figured it out.

I have no investments, deductions, RRSP's or anything, just straight income, so its really simple for me.

It's seems more confusing at first then it is in reality.

Re: Canada signs FATCA treaty
 

No, that's just scaremongering.

It just means that Canadian banks can fulfil their FATCA obligations by reporting to the Canada Revenue Agency, rather than directly to the IRS.

Britain and Ireland were among the first countries to sign up to FATCA agreements, and there is no indication that banks are seeking to close U.S. connected accounts. Over time, banks will probably request a U.S. Social Security Number or tax ID number, but that's it.

The issues with some French and Swiss banks thinking they can avoid FATCA by running away from U.S. business are perhaps special to those countries.

Re: Canada signs FATCA treaty
 

Thanks for your reassuring response! :D I hope it is this way (voluntary)....

I agree! I'm amazed at the number of countries that have bowed down to the US and signed this agreement. Japan and Canada initially protested but it seems both have worked out some concessions and are on board now.



EDIT: Found an interesting website for Canadians who are "inadvertent Americans".

http://maplesandbox.ca/2014/have-you...u-a-us-person/

Re: Canada signs FATCA treaty
 

Don't forget Ireland signed up rather than risking losing a lot of foreign direct investment by companies including Microsoft, Google, Paypal, Intel, HP, IBM, Dell, eBay, Amgen, Analog Devices, Apple, Bank of America, JP Morgan, Johnson and Johnson, Pfizer, Procter and Gamble, United HealthGroup, Eli Lily to name but a few of the companies keeping Ireland technically in growth.

Out government never even thought about not agreeing to facta and our banks refusing to offer US citizens with bank accounts would have been met with stiff and speedy retribution by the politicians lest we upset the apple cart.


I suspect similar thinking was afoot in the UK as well.

John

Re: Canada signs FATCA treaty
 

It's not like it's mandatory to pay someone to do your taxes. People have a choice. Other choices include doing it themselves or using software to help them (e.g. Turbo Tax).

Re: Canada signs FATCA treaty
 

So just throwing this one out there. A friend of mine in the UK, let's call her Amy, is a bit worried about this, but she can't see how she'd ever get "found out", so curious to know your thoughts.

She was born in the UK, and identified as British. Has the accent, carries the passport, etc etc etc.

However, her dad is American. He went to the UK about 50 years ago and never left. Amy did get an American passport when she was in her teens - at the time, didn't really know about FATCA etc. She renewed it I think 5ish years ago, so it's valid for another 5 or so years (it's a 10-year passport).

She's never filed taxes in the US at all - she doesn't have a SSN. She was born in the UK, so it's not like her passport has a US city as her birthplace (which is the issue her father has). She's only ever used her UK passport to open bank accounts. She married a Canadian a few years ago and is now living in Canada. All her paperwork for PR was done using her British passport (though in her application passport she did say she also has an American passport in the "countries of citizenship" section), but otherwise her British passport has been used for all her dealings in and out both the UK and Canada.

So yes, she is technically an American, but she can't see any way that she would be reported - banks don't ask for your parents' citizenships when they open bank accounts... just for yours, and she's only been using British for that.

Any thoughts?

Re: Canada signs FATCA treaty
 

If she has a US Passport the US government knows about her.

Since she had to say she had a US passport on her immigration paper's to Canada, the Canadian Government knows about her.

If she has ever entered the US from Canada, both countries will have shared information on that.

While the banks may not figure it out, is it really wise to potentially get into trouble with the IRS by trying not to file the required information and tax returns each year?

If she is dirt poor, well the IRS probably won't bother much, but if she isn't, seems a bit risky to me.