Starting July 1, banks must look for markers that identify accounts belonging to Americans

“Starting next July, Canadian banks will be required to ask anyone opening a new account if they are now, or ever have been, an American ‘person’.  It comes at the behest of the U.S. government and its efforts to ‘smoke out’ tax dodgers.  The Foreign Accounts Tax Compliance Act, or FATCA, was passed by the U.S. Congress in 2010 and comes into force July 1, 2014”, wrote James Fitz-Morris of the CBC News, early this morning. “The law forces all banks and other financial institutions outside the U.S. to search for customers who have certain ‘indicia’. Those are markers that show the person may be a U.S. citizen or a former permanent resident who, under U.S. law, must file income tax returns to Uncle Sam no matter where they reside in the world.  The only other country with similar tax rules for expats is Eritrea. When announcing the law, U.S. President Barack Obama said,’if financial institutions won’t cooperate with us, we will assume they are sheltering money in tax-havens and act accordingly’.  ‘The threat is a withholding tax of 30 per cent levied on every transaction a non-compliant bank has coming from, or even passing through, the U.S.  Bottom line is: there is absolutely no way that a large, modern financial institution like a Canadian bank or a large credit union could escape FATCA,’ says Marion Wrobel, vice-president of policy and operations at the Canadian Bankers Association (CBA).” “Wrobel says his organization has been fighting FATCA since it was announced, calling it the ‘extra-territorial’ application of American law.” Read the full article here. | Raymond Matt, CFP, CLU, TEP, CHS

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