For immediate release
Toronto, ON, February 5, 2014 – The CBA has been very clear on FATCA (the Foreign Account Tax Compliance Act) from the beginning: while we understand that the U.S. government is attempting to address tax evasion, we have opposed how they are going about it with FATCA. Canada is not a tax haven and Americans do not move here to evade taxation.
Despite international opposition, including from Canada, the FATCA implementation deadline remains unchanged, so we have agreed with the federal government that entering into an intergovernmental agreement (IGA) is the best approach under the circumstances. We recognize and support the efforts that the Canadian government has made. The alternative would potentially expose Canadians to punitive U.S. withholding taxes on income from their investments, including retirement income, of 30 per cent. The IGA should avoid that and ensure that the domestic rights of Canadians are respected while still sharing relevant taxpayer information bilaterally.
FATCA is simply one part of the new global reality. The G20 has stated publicly that the best method of addressing tax evasion internationally is through the expanded use of tax information sharing and they have asked the OECD to develop “a new single global standard for automatic exchange of information.”
The IGA is the framework but the details of how banks and other financial institutions will implement the IGA will be outlined in the implementing legislation and the Canada Revenue Agency guidelines. We will be reviewing the legislation and guidelines when they are released.
More information will be communicated to bank customers by the banks, the CBA and through Canada Revenue Agency.
The federal Department of Finance and the Canada Revenue Agency have information on the FATCA IGA on their websites at these links:
About the Canadian Bankers Association
The Canadian Bankers Association works on behalf of 59 domestic banks, foreign bank subsidiaries and foreign bank branches operating in Canada and their 275,000 employees. The CBA advocates for effective public policies that contribute to a sound, successful banking system that benefits Canadians and Canada's economy. The Association also promotes financial literacy to help Canadians make informed financial decisions and works with banks and law enforcement to help protect customers against financial crime and promote fraud awareness. www.cba.ca