First, here is the text of the intergovernmental agreement--it is not a signed copy unfortunately, which leaves a couple of technical questions unanswered for now. Here is the Press Release from the United States. Here is the Press Release from Canada, and here are explanatory notes to the agreement, a "backgrounder", and an FAQ,
Canada's Department of Finance has also produced a draft legislative proposal that would implement the agreement into Canadian law. This includes text for a new section on Enhanced International Information Reporting in the Income Tax Act. Assuming that the agreement is considered to be a treaty, Parliament needs to be officially notified that an agreement has been signed and 21 sitting days must pass before legislation is introduced to implement the agreement into Canadian law, which would take us to roughly March 27.
During Thursday's Parliamentary proceedings, MP Murray Rankin offered some pointed questions on the pact and the implications for the financial privacy of Canadians, but I am afraid the answers may actually sow confusion, more on that later.
Comments on the legislative proposal can be submitted to the Department of Finance at IGA-AIG@fin.gc.ca or to the address below. The closing date for comments is March 10, 2014.
Tax Policy Branch: Department of Finance
140 O’Connor Street Ottawa, ON K1A 0G5
The media, mostly Canadian at first, has taken notice of the agreement and many are commenting on the privacy concerns as well as the reciprocity and scope of the deal:
- Patrick Cain explains the agreement and its implications;
- James Fitz-Morris explains how the pact takes some heat off Canadian banks but leaves several problems unresolved;
- Louise Egan and Patrick Temple-West discuss the agreement and challenges that remain;
- Robert Wood discusses the shrewdness of using the CRA to bypass privacy protections;
- Windsor Star Editorial discusses enduring privacy concerns;
- Theresa Tedesco at the Financial Post comments on the scope of FATCA and what reciprocity really means.
More to come as things unfold in the coming weeks.
Thank you for these Allison. I am looking forward for your analysis as things unfold. BTW, you may want to include our resident CBT apologist's article to the list: http://www.theglobeandmail.com/report-on-business/ottawa-to-give-irs-information-on-americans-in-canada/article16710461/
ReplyDeleteWhile there has been a public announcement of an agreement being "signed" as of yet it's text and explanatory memorandum have not been tabled before Parliament. Of course this means the 21 day sitting day/waiting period has not yet started. If it were to start tomorrow lets say tomorrow they first day implementation legislation could now be introduced is April 2nd.
ReplyDeletePast history indicated that it takes the government up to three months to actual table most tax treaties and TIEA texts and explanatory memorandums before parliament. If both governments intend to implement FATCA only July 1st it would appear this agreement must moved along much faster. Interestingly enough though there was no public signing ceremony and there is not an available text from either the US or Canada that has an actual blue ink signature on it. Given this fact it would appear not all final approvals for signature have yet been made by both governments. Additionally the previous reference to three months to table and publish treaty text in past tax treaties and TIEA's is in reference to real blue ink signed agreements.
Thanks Tim. There really is no all-fired hurry here because Canada has already been added to the "deemed to have an IGA in effect" list. Per Notice 2013-43, this means that in signing, Canada has already beat the July 1 deadline, but "may be removed from the list of jurisdictions that are treated as having an IGA in effect if the jurisdiction fails to perform the steps necessary to bring the IGA into force within a reasonable
ReplyDeleteperiod of time." Somewhere, there are details on what a reasonable period of time means, but I can't recall off hand. Presumably a safe delay would be until the time when Canada is supposed to turn over the first set of FATCA-related disclosure to the IRS. Art 3 para 5 suggests that is nine months after the close of the year to which the info relates; for the 2014 info then that would presumably be September 30, 2015 (assuming no more delays on the US side).
Forgot to add: this demonstrates there is time for a thorough discussion to be had in Parliament, no need to rush things through.
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