What is the Foreign Account Tax Compliance Act?

The Foreign Account Tax Compliance Act (FATCA) is United States (U.S.) legislation that was passed in 2010. It requires financial institutions worldwide to report accounts held by U.S. taxpayers and citizens.

The purpose of FATCA is to encourage better tax compliance by preventing US persons from using foreign banks and other financial organizations to avoid US taxation on their income and assets. A significant number of countries worldwide have signed inter-governmental agreements (IGAs) relating to FATCA compliance with the US government.

Canada's Department of Finance announced on February 5, 2014, that Canada and the United States signed an Inter-Governmental Agreement (IGA) to improve international tax compliance and to implement the FATCA legislation. Canada implemented legislative changes that require Canadian financial institutions to be FATCA compliant under Canadian tax law. All Canadian financial institutions are required to examine their member information and report to the Canada Revenue Agency (CRA) on specific accounts held by U.S. persons and businesses. This annual reporting is provided to the U.S. Internal Revenue Service (IRS) through the CRA. The provisions of FATCA came into effect on July 1, 2014.

What does this mean for Alterna members? 

As per Foreign Account Tax Compliance Act (FATCA) regulations, certain financial accounts held by U.S Persons must be identified and reported by Financial Institutions to Tax Authorities. In cases where we identify a specific personal or non-personal account may be affected by these requirements, we will contact the member and ask for self-certification to determine whether the account holder or any controlling persons are U.S. persons.

Where can I find more information?

For more information on Foreign Account Tax Compliance Act (FATCA) and how it might affect you, please contact your tax professional.

Further information about the FATCA is available on the following sites:

• • Canada Revenue Agency
  • Department of Finance Canada
  • Internal Revenue Agency

Common Reporting Standard (CRS)

What is the Common Reporting Standard?

The Common Reporting Standard (CRS) is a global standard developed by the Organization for Economic Co-operation and Development (OECD) to enable the exchange of tax-related information between participating countries. The automatic exchange of financial account information between tax administrations will be used in fighting tax evasion and to promote voluntary compliance with tax laws. Canada and more than a hundred other countries are committed to its implementation.

The Government of Canada passed laws to implement CRS in Canada in 2016. The CRS in Canada, effective July 1, 2017, requires that financial institutions identify members with tax residency outside of Canada and the U.S. and report these members and their account information to the Canada Revenue Agency (CRA), to be shared with the relevant jurisdiction in which the account holder resides for tax purposes.

What does this mean for Alterna members?

During the account opening process, members will be asked to declare their country or countries of tax residency. Existing members may also be requested to declare their tax residency when making any changes to their personal information. In some circumstances, members may be required to provide additional information or documentation.

Where can I find more information?

For more information regarding how Common Reporting Standard (CRS)  may affect you, please contact your tax professional.

Further information about CRS is available on the following sites:

• • Canada Revenue Agency
  • Organization for Economic Co-operation and Development (OECD)

What is the difference between FATCA and the CRS?

Foreign Account Tax Compliance Act (FATCA) and the Common Reporting Standard (CRS) are efforts to fight tax evasion and improve tax compliance. FATCA focuses on members who are U.S. tax residents, whereas CRS applies to members who are foreign tax residents, other than the U.S.

Please note that Alterna Savings provides the above information for your personal use only, and will not be held liable for any loss or damage as a result. Alterna Savings does not guarantee that the information provided is complete or accurate. Links from this website to other websites, or references to products, services or publications other than those of Alterna Savings, do not imply that Alterna Savings endorses such websites, products, services or publications.