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Thread: FACTA Invades Canada

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    Banned Melonie's Avatar
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    Default FACTA Invades Canada

    this may be worth some research by Canadian girls prior to FACTA taking effect on January 1st ... from


    (snip)"FATCA Invades Canada

    The Foreign Account Tax Compliance Act (FATCA) is a legislation that was passed in the US in 2010, However, starting in July 2014 all Canadian financial institutions will be required to report to the IRS all of the account balances of a “US Person”.

    What does US tax law consider a “US person“?
    A citizen of the US (including an individual born in the US but resident in Canada)
    A lawful resident of the US (green card) A person residing in the US
    A person who spends considerable amount of time in the US on a yearly basis “Canadian snowbirds”
    US corporations, estates, and trusts

    What is also worth noting is that the IRS Supplemental Notice 2011-34 lists additional criteria that, if they pertain to you, will make you eligible for scrutiny under FATCA:
    1. A US residence address or a US correspondence address (including a PO box)
    2. Transferring funds to an account maintained in the US or directions regularly received from a US address;
    3. An “in care of” or “hold mail” address that is the sole address with respect to the client;
    4. Having power of attorney or signatory authority granted to a person with a US address.
    5. Married to a US person

    What does this new law mean to the average Canadian Citizen? Once again, less privacy, bigger government, and greater economic inefficiencies. Complying with FATCA will surely be expensive bureaucratic work and this expense will be pushed onto the consumer. I would not be surprised if banks start charging higher fees– fees that will rob the savings of the middle class, in addition to inflation. Of course, if you pertain to any of the criteria listed above, you may be under scrutiny by your bank and may be subject to a 30% withholding tax on US source income.

    Bank and credit unions will be searching all accounts looking for any indications that you might be a “US person”. For instance, receiving funds from a US source is viewed as a “connection” to the US which will require you to validate your “US person” status and/or paying taxes on that income. Failure to comply may result in the closure of your account, thus providing limited options for Canadians due to the fact of Canada’s oligopolistic banking sector. ***

    Although not quite the same issue, most people in Cyprus never saw their banking crisis coming. We are not saying there will be a banking crisis here in Canada, however, it is wise to be prepared for the worst case scenario. Besides the writing is on the wall even for Canadians with the so-called “bail-in” scheme that got introduced into the 2013 economic action plan at the beginning of the year.(snip)

    from


    The primary area of relevance for SW readers would appear to be a scenario like Canadian camgirls who are receiving regular checks or electronic funds transfers from webcam hosts using US addresses and US banks. I'm also reasonably sure that FACTA will also be enacted by Australian, Eurozone, UK etc. banks at the same time it is enacted by Canadian banks i.e. the first of January. Thus camgirls with bank accounts in these countries who are receiving regular funds transfers from webcam hosts using US addresses and US banks may face a similar scenario.

    I believe that the author's comments about the Canadian gov't's 'bail in' plans for systemically important Canadian banks stems from an assumption that, upon FACTA being enacted for Canadian bank accounts, a whole lot of Canadian bank deposits presently owned by US citizens are likely to be withdrawn and moved elsewhere. Traditionally, it has been rather easy for many 'middle class' US citizens to do some 'anonymous' banking in Canada ... which FACTA will now bring to a screeching halt ... thus removing a major reason for those US citizens to maintain Canadian bank accounts.
    Last edited by Melonie; 11-30-2013 at 05:48 AM.

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    Default Re: FACTA Invades Canada

    Is there any way around this or are canadian camgirls like me just screwed?

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    Default Re: FACTA Invades Canada

    Thanks for the heads up on this!

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    Banned Melonie's Avatar
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    Default Re: FACTA Invades Canada

    ^^^ as is clear from the original post date, FACTA has been 'percolating' in Canada for a while. Canadian banks brought a legal challenge, but lost. At the moment, status seems to be as follows ...


    (snip)"Starting on July 1, new rules will be [ were - sic ] put into place to help identify which accounts are "U.S. Reportable Accounts."

    Over 2014 and 2015, the financial institutions will be sifting through their accounts to figure out which ones are "U.S. Reportable Accounts" — meaning which ones are owned by a U.S. person or corporation.

    A system will be developed to do this that will look for indicators of U.S. connections, such as U.S. birthplace, U.S. addresses or phone numbers, an American power of attorney, or standing orders to transfer funds to the U.S.

    Financial institutions can also flag individuals if they have any reason to believe they are a U.S. citizen.

    Accounts under $50,000 will be deemed compliant unless a bank has reason to know the client has U.S. status. Accounts above $50,000 will get flagged if any electronic data on hand indicates U.S. connections.

    Those deemed U.S. persons will be asked to complete a special taxpayer identification and certification form.

    Starting in March 2015, banks will begin annually sending information about those accounts to the IRS, either directly or through the Canada Revenue Agency, depending on the agreement the federal government signs."(snip)


    Now Canadian dual citizenship individuals have brought a lawsuit ... see However, since the Canadian gov't had previously signed onto FACTA, the IRS will still get their financial data. Scuttlebut is that dual citizens without US income sources can officially renounce their US citizenship if they wish to escape the new IRS reporting ... but this costs a bit of money, and can also prevent them from visiting the US in the future.

    It's fairly clear that the Canadian bank account transactions of US citizen US resident, US citizen Canadian resident, and US/Canadian dual citizen Canadian resident persons, will be reported to the IRS. But unclear at the moment is the 'reportability' of over $50,000 corporate accounts in Canadian banks which have an electronic paper trail of making regular transfers to US accounts ... which could potentially include payment processors like Canadian based Paxum. Same 'reportability' question arguably applies in reverse regarding corporate Canadian bank accounts of US webcam hosts used to make payment to Canadian resident camgirls, personal Canadian bank accounts of Canadian camgirls which receive regular transfers from US income sources, etc.

    The main problem is that nobody yet knows exactly what 'US Person' actually means, what sort of data will be handed over to the IRS by Canadian banks in March of 2015, nor what specific things the IRS will use that data for after they receive it.
    Last edited by Melonie; 09-25-2014 at 02:25 PM.

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