FATCA Hits Trouble In Canada

It’s meant to be a law that finds the offshore assets of US taxpayers but the legislation has caused a storm in Canada where one party is trying to put a stop to the new legislation.

The country’s Green Party is urging the Canadian government to resist the demands of the Foreign Account Tax Compliance Act (FATCA) which would compel Canadian financial institutions to hand over the account details of any American customers.

Increasing numbers of countries are signing up to the law, mainly via an intergovernmental agreement (IGA) which would help protect their institutions from breaking their own laws, such as privacy and data protection, in order to comply.

Canada revealed in November that it too was negotiating an IGA with the US.

FATCA brings a heavy burden for the institution which doesn’t comply because the US will impose a 30% withholding tax on all transactions between it and the institution involved.

Privacy rights

Now the Green Party of Canada is calling for FATCA to be resisted as the law undermines a person’s right to privacy and brings substantial costs for an institution fulfilling legal obligations.

They add that FATCA doesn’t benefit Canadians ‘in any way’ though the countries signing IGAs with the US are exchanging information on their taxpayers with assets in America.

However, the big fear for the Green Party is the definition in the act of what a ‘US person’ is.

A spokesman said: “Under the law, we will see people who are Canadian citizens being classed as US persons because they happened to be born in the USA or have a parent who is a US citizen.

“There’s also an issue with what is being termed as US ‘indicia’ which will see Canadians with an American spouse who have their assets in joint names seeing their details being handed over.

Foreign trust

“Then there are the large number of Canadians who have lived and worked in the US and been given a social security number who will also see their details handed over.”

A recent demand from the US which required Canadians working in America to file all details of their financial accounts in Canada with their US tax returns caused an upset, since the information is considered a ‘foreign trust’ under US law and had no legal right to be revealed.

FATCA will come into effect in January 2014, and aside from the IGAs which are being hurriedly discussed, many institutions will rack up large bills in organising their data to find potential US taxpayers.

Though many will find that it will be easier, and cheaper, to comply with FATCA but not having any US account holders.

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FATCA Hits Trouble In Canada
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5 COMMENTS

  1. From the article: “They add that FATCA doesn’t benefit Canadians ‘in any way’ though the countries signing IGAs with the US are exchanging information on their taxpayers with assets in America.”

    Other countries do not care about where their citizens have assets or about income they earn in foreign countries. That is uniquely American. Foreign governments are strong-armed into complying with these stupid US rules because the US threatens to seize any assets these citizens from other nations may have over here if they don’t comply.

  2. Taxation without representation…. didn’t that lead to a revolution??!! I refused to burden all my children with US citizenship by not registering them as born to an American with dual citizenship. This is not only unconstitutional but also illegal within US law, not to mention that this is also a basic human rights violation forcing taxes on an individual who receives no services from complying. Isn’t that the basic concept of taxation, to share the wealth for the common good.

  3. Alas, our government has become a voracious parasite preying on those who cannot defend themselves from such financial aggression, the old, the weak, the poor, and the young, so that it can pay for it’s massive military spending at home and abroad in an attempt to force the world to comply with it’s grossly and selfishly materialistic and wasteful needs. I don’t use US public roads, schools, government services etc. Not to mention the shady and unfriendly US counselor services at US embassies. One such embassy will not even provide a phone service for US citizens. I must send an email to request an appointment. This email is used to track all US citizens traveling or living abroad. This is classic mafia style protection scheme. We’re watching you, pay up or face the consequences.

  4. The self proclaimed leader of the free world is the greatest threat to freedom everywhere. I urge freedom loving people to wake up and urge their governments to stop playing along with US government foreign policy. A human being is born free and should remain free as long as it respects others and the environment, as it has been for millions of years. We are increasingly becoming a world run by insane tyrants living in fear. This tyranny masquerades as democracy everywhere, securing power for the weak and greedy. We should be very concerned. Governments everywhere have got it all upside down and backwards thanks to the naive support of millions who live from a fear base paradigm. Born into slavery die into freedom. Couldn’t be more backwards.

  5. 19 Trillion dollars of debt last time I checked. This rampant spending is not only irresponsible but socially criminal. Forcing generations of children to what is essentially indentured slavery. Lifetimes enslaved to pay off our governments debts.

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