Frequently Asked Questions
Note: The information below is provided only as an overview for information purposes; it is not intended to serve as legal or tax advice. If you require such advice, you should consult a professional advisor.
The Foreign Account Tax Compliance Act (FATCA) was signed into U.S. law in March 2010. Canadian tax regulations related to FATCA will require financial institutions in Canada to report annually on “reportable accounts.” This reporting will be made available to the U.S. Internal Revenue Service through the Canada Revenue Agency.
“Reportable accounts” are personal and non-personal accounts held by:
- one or more U.S. persons; or
- certain entities in which one or more U.S. persons hold a substantial ownership or controlling interest.
Many additional limitations apply, further reducing the number of accounts that will qualify as “reportable.” In the end, we expect Canadian tax regulations related to FATCA to have no impact on the vast majority of our clients.
Note: If you want help in determining if you are a U.S. person or how Canadian tax regulations related to FATCA will affect your accounts, we suggest that you speak with a professional tax advisor.
That will depend on whether or not your accounts are determined to be “reportable.” We expect Canadian tax regulations related to FATCA to have no impact on the vast majority of our clients.
For most personal banking clients, information we have on file will allow us to determine that no reporting is required.
If the information you have provided indicates that reporting may be required for your accounts, we will ask you to provide additional information — possibly in the form of new documentation regarding your U.S. tax status. We will then review the information you provide against the applicable requirements to determine whether or not your accounts are reportable.
For most businesses, the documentation we have on file will allow us to determine that no reporting is required.
If your business is of a type for which we are required to obtain additional documentation, we will ask you to provide that documentation. We will then review the new documentation against the applicable regulations to determine if your accounts are reportable.
Tax law is a highly specialized field. While we can provide general information on Canadian tax regulations related to FATCA, we are strictly prohibited from providing tax advice. If you want advice on how to respond to questions and requests related to these laws, we suggest that you speak with a professional tax advisor.
If you want help in determining if you are a U.S. person for the purposes of Canadian tax regulations related to FATCA, we suggest that you speak with a professional tax advisor.
Attributes that generally cause an individual or business to be classified as a U.S. person include:
- U.S. citizenship;
- being a lawful resident of the U.S.; and/or
- qualifying as a U.S. corporation, estate, or trust.
The IRS provides information on the rules applicable to non-U.S. citizens here:
If you are a U.S. person, we may be required to ask you to complete an IRS W-9 form (Request for Taxpayer Identification Number and Certification) for our records.
In addition, we may be required to provide annual reports on your account to the Canada Revenue Agency, which would forward them to the U.S. Internal Revenue Service. This should have no impact if you are already meeting your existing U.S. tax filing obligations, but we encourage you to review this with a professional tax advisor.
Canadian tax regulations related to FATCA will come into effect in stages, beginning on July 1, 2014. On that day, financial institutions must begin to:
- Use new account opening procedures that ensure the account holder’s U.S. tax status is determined when the account is opened.
- Review existing accounts to identify those that are subject to reporting.
Canadian financial institutions will be required by Canadian law to comply.
Globally, most large financial institutions intend to comply.
No, this is not altogether new. Reporting of account activities to Canadian tax authorities has long been legally required at some level. As well, reporting regarding certain financial transactions has been required under the provisions and safeguards of the Canada-U.S. Tax Convention for years. The Canadian tax regulations related to FATCA simply build on these existing financial reporting structures by adding new types of data to the list of what must be reported.
Scotiabank has a policy of strict adherence to privacy legislation and protection of client data. Our response to Canadian tax regulations related to FATCA will be held to our standard of strict compliance with Canadian privacy laws.
If you choose not to meet requests for assistance in determining your U.S. tax status, Canadian law will require us to treat your accounts as “reportable accounts.”
No, Canadian tax regulations related to FATCA apply to many other types of financial accounts, including certain business accounts, insurance contracts, and investment or brokerage accounts.
No, in and of itself, the currency of an account has no impact on whether or not it is treated as a “reportable account.”
If at least one of the joint owners qualifies as a U.S. person, any required reporting would treat the U.S. person as the owner of the entire account.
If more than one of the joint owners are U.S. persons, any required reporting would treat each U.S. person as the owner of the entire account.
I already have a W-9 [or W-8] form on file with Scotiabank. Why are you asking me to provide another one?
Each of Scotiabank’s business lines will need to obtain appropriate documentation. Despite our best efforts to streamline this process, you may be contacted by more than one business line regarding this documentation. We apologize for any resulting inconvenience, and we greatly appreciate your patience.
Disclaimer: Although all due care was taken in the creation of these answers, Scotiabank will not accept any liability as a result of any error or inaccuracy. If you think that Canadian tax regulations related to FATCA may apply to you, you should consult appropriate tax or legal counsel.