FATCA, you and RBC – Our shared reporting obligations

On February 5, 2014 Canada and the United States signed an Intergovernmental Agreement (IGA) to improve international tax compliance and to implement the Foreign Account Tax Compliance Act, known as FATCA.

Following the signing, Canada implemented legislative changes that included amendments to the Income Tax Act (Canada). As a result, Canadian Financial Institutions are now obligated to identify accounts held by U.S. persons and accounts for certain non-U.S. entities in which U.S. persons have an interest. Under Canadian law, institutions must report certain information about these accounts (U.S. Reportable Accounts) to the Canada Revenue Agency (CRA) annually. In turn, the CRA will forward the information to the U.S. Internal Revenue Service (IRS).

Who or what is a U.S. person?

The IRS definition¹ of a “United States Person” includes:

• A citizen or resident of the United States
• A domestic (U.S.) partnership or corporation
• Any estate other than a foreign (non-U.S.) estate
• Any trust if:
  • a court within the U.S. is able to exercise primary supervision over the administration of the trust, and
  • one or more U.S. persons have the authority to control all substantial decisions of the trust.

A citizen of the U.S. (including an individual born in the U.S.), who is a resident in another country for tax purposes, can still be a U.S. person if they have not renounced U.S. citizenship.

A resident² of the U.S. includes:

• A lawful resident of the U.S. (including a U.S. green card holder); and
• A person who spends a certain number of days in the U.S. each year. For example, some Canadian “snowbirds” may be considered U.S. persons. However, the Canada-U.S. tax treaty allows them to claim benefits to be treated as Canadian rather than U.S. taxpayers.

For more information

Visit www.rbc.com/aboutus/fatca.html for information on RBC’s approach to FATCA.

For more information on FATCA from the IRS, visit www.irs.gov/Businesses/Corporations/Foreign-Account-Tax-Compliance-Act-(FATCA)

Note: RBC businesses will each maintain client FATCA documentation and, accordingly, you may be contacted separately regarding FATCA by each RBC business with which you have an account.

Completing your W-8BEN or W-9 Form

If you are a U.S. person, you will need to provide a W-9 form. If you are not a U.S. person, a W-8BEN is required.

You can access these forms online by selecting "Forms and Agreements" from the My Portfolio menu. Select the W-8BEN & Tax Residency Self-Certification Substitute Form or the W-9 Substitute form and follow the steps on screen to complete and submit electronically. Once completed, your submission is tracked and you do not need to mail a paper form.

If you need to complete your form in writing, visit Forms & Agreements to download, print and complete your form. Bring it in to any RBC Royal Bank branch, or mail it to RBC Direct Investing at the address below:

RBC Direct Investing Inc.
Royal Bank Plaza
200 Bay Street, North Tower
P.O. Box 75
Toronto, ON       M5J 2Z5

Please note that if you do not provide the documentation requested, RBC is required under the terms of the IGA to report certain information about your account to the CRA. Failure to provide the requested documentation may also limit your access to some financial products or services, and your account may be subject to unnecessary taxes under the QI (Qualified Intermediary) Regulations.

If you have questions or require assistance, please contact us. Speak to your professional tax advisor to learn more about how the legislation may affect you.

The information provided in this article is for general purposes only and does not constitute personal financial advice. Please consult with your own professional advisor to discuss your specific financial and tax needs.

 

¹ Source: https://www.irs.gov/individuals/international-taxpayers/classification-of-taxpayers-for-us-tax-purposes

² Source: https://www.irs.gov/pub/irs-pdf/p519.pdf