The Foreign Account Tax Compliance Act (FATCA) was signed into U.S. law in March 2010. The intent of FATCA is to discourage tax evasion by U.S. taxpayers who hold financial assets with non-U.S. financial institutions.
On February 5, 2014 the Canadian government entered into an intergovernmental agreement with the U.S. that has the effect of making FATCA Canadian law. Accordingly, Canadian financial institutions such as Canadian Western Bank and its affiliates must comply with FATCA in order to comply with Canadian law.
Under FATCA, non-U.S financial institutions have to adopt processes to assist in identifying accounts held, directly or indirectly, by U.S. persons and provide periodic reporting on these accounts. Canadian financial institutions will have to provide information about these accounts to the Canada Revenue Agency. The Canada Revenue Agency may in turn share this information with the U.S Internal Revenue Service under the long-standing Canada-U.S. Tax Convention.
FATCA will be implemented in stages. Beginning July 1, 2014, Canadian Western Bank and its affiliates are required to adopt account opening procedures for certain accounts opened by individuals (non-entities) to identify account holders who may be U.S. persons, and begin a review of previously opened accounts to identify account holders who may be U.S. persons. Beginning January 1, 2015, FATCA will begin to apply to certain accounts opened by entities.
The Canadian Western Bank Group is committed to implementing FATCA while at the same time ensuring that our clients are impacted as little as possible.
Should you require more information, you may find the following links useful: