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Foreign Account Tax Compliance Act (FATCA)

The Foreign Account Tax Compliance Act was signed into United States law in March 2010 as a way to prevent American taxpayers from using financial accounts outside of the U.S. to evade taxes.

As of July 1, 2014, as a result of an intergovernmental agreement between Canada and the U.S., financial institutions must ensure that when accounts are opened by new clients, information needed to identify reportable accounts is received. In addition, financial institutions will need to identify accounts that were open on June 30, 2014, and that must be treated as reportable accounts.

The requirement to report applies to accounts held by "U.S. Persons" (as defined by U.S. tax law) and certain entities in which one U.S. Person or more has a controlling interest.* Under U.S. tax law, you are considered a U.S. Person if you are:

  • A citizen of the U.S. (including an individual born in the U.S. but living in another country without renouncing U.S. citizenship)

  • A lawful resident of the U.S. (including a U.S. green card holder)

  • A person residing in the U.S.

  • A U.S. corporation, estate, or trust


You also may be considered a U.S. Person for tax purposes if you spend a considerable amount of time in the U.S. annually. The IRS provides information on the rules applicable to non-U.S. citizens here:

irs.gov/Individuals/International-Taxpayers/Alien-Taxation---Certain-Essential-Concepts

If you're unsure about your U.S. tax status, or about how Canadian Tax Regulations related to FATCA might affect you, contact your tax advisor. If our records show that you might be affected by these regulations, we will contact you and will work with you to ensure that the situation is handled correctly. If you are a U.S. Person, we can look at your Accounts with you and let you know which, if any, may be reportable.

Further information on the intergovernmental agreement between Canada and the U.S. can be found on the CRA website here. Information is also available at the Canadian Bankers Association website.

Read Our FAQs About the Foreign Account Tax Compliance Act (FATCA)


 

What is FATCA?

The Foreign Account Tax Compliance Act was signed into United States law in March 2010 as a way to prevent American taxpayers from using financial accounts outside of the U.S. to evade taxes.

Under an agreement signed with the U.S. in February 2014, Canada agreed to pass laws requiring Canadian financial institutions (including Tangerine) to collect and report information about accounts that are identified as "reportable accounts." This annual reporting will be provided to the U.S. Internal Revenue Service (IRS) through the Canada Revenue Agency (CRA).

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Will the Canadian Tax Regulations related to FATCA have an impact on me?

If our records show that you might be affected by Canadian Tax Regulations related to FATCA, we will contact you and will work with you to ensure that the situation is handled correctly. The requirement to report applies to accounts held by “U.S. Persons” as defined by U.S. tax law and certain entities in which one U.S. Person or more has a controlling interest.*

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Who is a “U.S. Person” for U.S. tax purposes?

Under U.S. tax law, you are considered a “U.S. Person” if you are:

  • A citizen of the U.S. (including an individual born in the U.S. but living in another country without renouncing U.S. citizenship)

  • A lawful resident of the U.S. (including a U.S. green card holder)

  • A person residing in the U.S.

  • A U.S. corporation, estate, or trust

You may also be considered a U.S. Person for tax purposes if you spend a considerable amount of time in the U.S. annually.

For more information about U.S. Persons and their U.S. tax obligations, visit the IRS Website at:

http://www.irs.gov/businesses/corporations/foreign-account-tax-compliance-act-(fatca)
http://www.irs.gov/businesses/small/international/index.html

If you’re unsure about your U.S. tax status, contact your tax advisor.

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How will Tangerine know if the Canadian Tax Regulations related to FATCA apply to me?

If you have an existing Tangerine Account or are opening one, and there is an indication that you may be a U.S. Person based on the U.S. tax law definition, then we may ask you to provide additional information or complete a form to confirm your tax status.

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Will you let me know if you think the Canadian Tax Regulations related to FATCA might affect me? Will you discuss it with me before you decide?

Yes. If our records show that you might be affected by the Canadian Tax Regulations related to FATCA, we will contact you and work with you to determine if and how you may be affected.

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Do the Canadian Tax Regulations related to FATCA apply only to regular, personal bank accounts?

These regulations apply to many other types of accounts besides personal bank accounts. They also apply to certain business accounts, insurance contracts and investment or brokerage accounts. However, reporting is not required for certain types of accounts. For example, RSP accounts are exempt.

If you qualify as a U.S. Person, we can look at your Accounts with you and let you know which ones will be reportable under the Canadian Tax Regulations related to FATCA.

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If I am not a U.S. Person, but I have a U.S. dollar account, will it need to be reported to the CRA?

No, simply having a U.S. dollar account alone does not automatically make it reportable. It’s your U.S. tax status that determines whether your accounts are reportable.

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How are joint accounts handled under the Canadian Tax Regulations related to FATCA?

If at least one of the joint account holders qualifies as a U.S. Person, the account will be subject to the same reporting rules that apply to an account held by a single U.S. Person. Any required reporting would treat each U.S. Person as the owner of the entire account.

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