Canada and U.S. Sign Tax Information Sharing Agreement

Canada and the United States agreed to a new tax information sharing agreement which will potentially affect all American citizens living in Canada.

Effective July 1, 2014 Canadian banks and investment institutions will be required to report information regarding Americans with financial accounts held in Canada holding more than $50,000. This requirement relates to the Foreign Account Tax Compliance Act (“FATCA”) which was enacted in 2010 in response to a scandal relating to Americans hiding money offshore in Swiss bank accounts.

For each applicable account held by an American , Canadian banks and investment institutions will have to report the account holder’s name, taxpayer identification number, account number, ending account balance, and any income earned in the account on an annual basis. Banks will submit the information to the CRA which will in turn transmit the information to the IRS. more »