Canada's Finance Minister hopes to see the country's financial institutions exempt from the US's Foreign Account Tax Compliance Act, a law which requires the exchange of information on US clients.
The legislation, which was passed in March, 2010, requires foreign financial institutions (FFIs) to report US citizens holding more than USD50,000 in a depository or custodial account to the Internal Revenue Service. It is to apply to payments made after December 31, 2012.
Speaking to the Financial Times last week, Jim Flaherty said that he believes it is possible to have an exemption from the requirements.
According to the FT, Flaherty has stressed that, because Canada and the US already posses a tax information exchange agreement, subjecting Canadian financial institutions to such regulations would result in "unnecessary red tape".
Flaherty added: "I'm hopeful that we can look at it in a pragmatic way and that the US authorities will realise Canada's not a tax haven".
A comprehensive report in our Intelligence Report series giving a country-by-country analysis of offshore investment funds, stock exchanges and trusts, with an analysis of the US QI regime, is available in the Lowtax Library at http://www.lowtaxlibrary.com/asp/subs_reports.asp and a description of the report can be seen at http://www.lowtaxlibrary.com/asp/description_report9.aspTags: law | offshore | investment | agreements | banking | financial services | legislation | offshore confidentiality | Canada | United States | regulation | enforcement | services | Canada
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