Canadian news service CBC News reported that the Canada Revenue Agency (CRA) transmitted 315,160 banking records to the IRS on 28 September 2016, an increase of 104% compared with 2015.
Lisa Damien, a spokeswoman for the CRA, attributed the increase to the fact it was the second year for the Canada-US information sharing deal that was sparked by the Foreign Account Tax Compliance Act (Fatca).
“The exchange in September 2015 was based on accounts identified by financial institutions at the time,” she said. “The number of reported accounts was expected to increase in 2016, because the financial institutions have had more time to complete their due diligence and identify other reportable accounts.”
Tax purposes
Under Fatca, financial institutions are required to share banking records of those considered to be US persons for tax purposes.
This can include Canadian citizens born in the US, those with dual nationality, and those who spend a considerable amount of time in the US on a yearly basis.
Former prime minister Stephen Harper’s government argued that, given the penalties the US was threatening to impose, it had no choice but to negotiate the information sharing deal, CBC News reported.
Privacy
Canada’s privacy commissioner, Daniel Therrien, has raised concerns about the sharing of information. He has questioned whether financial institutions are reporting more than they is necessary.
Under Fatca, only accounts containing more than $50,000 (£39,829, €46,717) belonging to US taxpayers need to be reported.
Therrien has also suggested that the CRA proactively notify individuals whose records have been shared with the IRS.
The Canadian tax authority, however, has proven reluctant to agree to his suggestion.
Fatca repeal
Expat action groups around the world have been calling on the US to repeal Fatca since its inception in 2014.
US citizens and taxpayers living abroad have faced discrimination from financial institutions withdrawing services because they don’t want to comply with the onerous requirements of Fatca.
Falling foul of Fatca could see the IRS impose a 30% withholding tax on US source payments paid to the institutions or its clients.
Repealing Fatca, however, does not seem to be on president Donald Trump’s agenda.
Speaking to International Adviser, Nuri Katz, chief executive and founder of Apex Capital Partners, said: “To the best of my knowledge, Trump has not touched or spoken about Fatca. It’s not on his radar at the moment and is unlikely to be so because all of his slogans are about ‘making America great again’ and ‘bringing jobs back to America’.
“Fatca ensures that American tax money is paid to America.”
