Foreign Account Tax Compliance ActPrinter Version
The Foreign Account Tax Compliance Act (FATCA) was signed into U.S. law in March 2010. Its aim is to prevent U.S. taxpayers from using accounts held outside of the U.S. to evade taxes.
FATCA and, in some countries, related local regulations will require financial institutions to report annually on specified accounts held outside of the U.S. by U.S. taxpayers. This reporting will be made available to the U.S. Internal Revenue Service either directly or through local regulatory agencies.
Any financial institution that fails to comply with FATCA will face a 30% withholding tax on a wide range of U.S. sourced payments to its clients. In addition, countries that pass regulations supporting FATCA will enforce those regulations through their own regulatory agencies.
What does this mean to Scotiabank and our customers?
Across our entire global network, Scotiabank intends to meet all obligations imposed under FATCA in accordance with local banking and tax regulations. To that end, we have created a team of professionals committed to implementing the changes required to meet those obligations while minimizing impact on client experience.
We expect FATCA to have no impact on the vast majority of our clients. In any case where we determine that a specific personal or non-personal account may be affected by FATCA, we will:
- contact the account holder to explain why the account may be affected; and then
- work with the client to ensure that the situation is handled correctly.
The Scotiabank Group has always been committed to keeping clients' personal information accurate, confidential, secure, and private. In every jurisdiction, our response to FATCA will be held to our standard of strict compliance with local privacy rules, and our approach will reflect our longstanding commitment to client privacy and client service.
Scotiabank operates in more than 55 countries. Many of those countries are currently negotiating an Intergovernmental Agreement (IGA) with the U.S. regarding FATCA, and several have already signed such an agreement.
- In countries where FATCA is integrated into local banking and tax regulations under an IGA, Scotiabank intends to meet all resulting legal obligations.
- In all other countries, we intend to comply with FATCA while maintaining strict adherence to existing banking and tax regulations.
When does this come into effect?
FATCA will come into effect in stages, beginning on July 1, 2014.
How can I stay informed?
As information on new developments is released, we will keep you informed by posting updates on our website.
Need more information?
Click here to see answers to frequently asked questions about FATCA.
Information on the Intergovernmental Agreement (IGA) between Canada and the U.S. can be found here.
You can find detailed information on FATCA at www.irs.gov/FATCA.
If you have questions or concerns that may be shared by other Scotiabank clients, send them to FATCA@scotiabank.com. We will incorporate any that are of general interest into future updates to this FATCA page, along with our response.