The initial July 1, 2014 FATCA compliance deadline is fast approaching. IIAC’s goal is to help ease the burden.
In fact, IIAC’s opening statement in front of the House of Commons during its hearings on Bill C-31 emphasized the importance of passing the Canadian legislation to implement FATCA, says Ian Russell, president & CEO of IIAC. This helped ratify the Canada-U.S. agreement.
Read: Get clients ready for FATCA
How? Deferral of the Canadian legislation would have placed a more costly and difficult FATCA compliance burden on Canadian financial institutions, he says.
“This action was not because we are pro-FATCA; it is because we believe the Canadian legislation was the best possible mechanism to comply with the FATCA reporting framework for Canadian investors and their financial institutions,” notes Russell.
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Further, he says, “without an agreement with the U.S. authorities, the reporting obligations could have become even more onerous over time. Deferral would have re-triggered the requirements for direct dealings between Canadian financial institutions and U.S. tax authorities, requiring disclosure of individual client information to the U.S. authorities and mandating closure of client accounts for non-compliance.”
Russell also notes, “many small investors, who might have been exempt from reporting requirements under the Canadian IGA (such as the exemptions for registered accounts mentioned above), could become subject once again to full FATCA reporting obligations.”