http://technology.canoe.ca/Columnists/Canton/2012/06/01/19827956.html In March 2010, the U.S. government enacted the Foreign Account Tax Compliance Act (FATCA) that aims to obtain information to prevent American citizens from evading taxation through the use of foreign entities. Sounds innocuous enough - but the act is going to have some extreme effects on Canadian financial institutions and Canadian citizens with U.S. connections, even tenuous ones. This law is in force Jan. 1, 2013, and raises privacy issues for Canadians. In brief, the act requires an additional layer of reporting from all U.S. taxpayers who have "foreign financial accounts" at "foreign financial institutions." Keep in mind that unlike most countries, the U.S. assesses income tax based on citizenship, not just residence. This could mean that someone who has lived in Canada virtually their entire life, but was born in the U.S., or who may have been born in Canada to parents who were American citizens, is expected to file and pay U.S. taxes. Though there are tax treaties between Canada and the U.S. that essentially say that someone who resides in Canada and pays taxes here will not be double taxed, those treaties are not simple, and may not apply in situations where tax treatment differs. The Foreign Account Tax Compliance Act also imposes reporting requirements for all foreign financial institutions worldwide. Banks in Canada and elsewhere are forced to use systems to identify U.S. persons who have invested in either non-U.S. financial accounts or non-U.S. entities. Banks must also enter into an information-sharing agreement with the IRS whereby they provide account information about these individuals to the IRS. Banks who do not enter into this information-sharing agreement will have a 30% tax withheld on funds that originate from, or go through, the U.S. banking system (the "withholding tax"). Banks are obliged to withhold the 30% tax on transfers to other banks who do not enter into the agreement. The enhanced reporting burden on Canadian banks comes with a hefty financial burden as the act is expensive and complex to implement. Banks must alter their information-gathering policies to ensure that their identification requirements match those of the act's requirements. In other words, we have U.S. legislation that requires Canadian banks to create and instal expensive systems to send the U.S. government financial information about Canadians who may have some tenuous connection with the U.S. The cost of these systems will be borne by the banks, and thus indirectly by Canadians in general, and Canadian governments in terms of fewer taxes as a result of the higher initial and ongoing compliance costs. First the Obama Administration levees a tax on crossing into the US, of $5.00, to Canadians only. Now wants to add by incorporating new tax laws regarding international commerce, to Canadians tax payers, to pay for the transition software and implementing its uses, while identifying what ties to the US Hate to say it Obama, but if you continue this kind of behaviour, whilst letting illegal immigrants on the Mexico side come over, work, and vote, your gonna loose! Canada has been a good neighbor, but we have limits... Go ahead Liberals...tell me how you have rights on someone else's country!!! That would be your champion...Obama starting that!
I would want to look this up to see if it includes American businesses, as well, or just penalizing citizens. Regardless, we consider US jurisdiction to be anywhere we feel like it. Do you remember the Russian pilot who was in Liberia that we arrested/kidnapped in Monrovia for alleged crimes in the US? 20 years ago we would have never kidnapped a foreign national, let alone extradited him from a third party territory.
The US enforces Israeli taxes on Germany, invades and destroys whole nations, so maybe everyone should do as we do in the "land of the free" pay taxes and submit to obstructive regulations all designed to keep the American people down.
An American citizen living in Canada and complaining about his patriotic duty to pay whatever his owners, I mean, benefactors demand of him? You sound like a terrorist to me. You're probably on Obama's kill list already.
Of course, when there is a problem somewhere, the "conservatives" are out in force screaming how the USA should invade somewhere to "protect the rights of US citizens". Tough it out. It costs to be part of the USA. We have no need to support free-riders living in other countries. Renounce your citizenship if you don't like it.
If I was born in American yet had been in Canada since I was a kid, I sure as (*)(*)(*)(*) wouldn't be paying the US anything in taxes.
Technically, the US has the right with about a dozen or so tax treaties, not just FATCA, FIRPTA, and a whole host of other laws. For quite some time, if you had a foreign trust, the financial institution is required to submit that form to the US Treasury deptartment. Some do, but some, espeically in Mexico, do not. Hwwever since this law was enacted in the aftermath of the UBS scandal, I see why it was enacted. If you want to blame anyone, blame the bloats who intentionally evaded taxes with the help of UBS. That being said, there is a whole host of forms that may be required, depending on your circumstances. The forms include, but not limited to: TD F 90.22-1, FBAR, Form 8865, foreign partnerships with US income from a trade or business in the US, Form 3520, Foreign Trust Return Form 3520-A, Foreing Trust Retun Form 5471, Form 5472 If you are in business abroad, you not only have to adhere to PCOAB/GAAP, but you may also have to abide by IFRS as well. And that can create some complications. Finally, the US should not be like Greece with a 40% to 50% noncompliance rate. Lowering taxes is not the answer since compliance rates are about the same among the different income levels. Furthermore, since we are living in a ever connected global economy, this is a natural progression. And taxing based on residency does not exclude the fact that worldwide income would not be taxed. Under the Canadian tax system, worldwide income is taxed at the federal level but not at the province level.
If would depend on whether or not you are considered a US Resident for tax purposes if you are not a citizen nor living in one of the US possessions. To be considered a US resident alien, you must meet one of three requirements: green card test, physical presence test, or electing to be treated as a resident alien because you are filing a joint return and the other spouse is either a US citizen or a Resident alien for tax purposes. For further explanation see IRC 7701 and Treasury Reg 301.7701-2 for more information.
