In February of 2014, Canada signed an intergovernmental agreement with the U.S. (the “Canada IGA”), in relation to a U.S. based law enacted in the same year called the Foreign Account Tax Compliance Act (“FATCA”). In accordance with the Canada IGA and FATCA, Canadian financial institutions are required to report specified accounts held by U.S. Persons to the Canada Revenue Agency (the “CRA”). The CRA is responsible for exchanging the information with the U.S. Internal Revenue Service in accordance with the Canada-U.S. Tax Convention.
VersaBank is committed to meeting the requirements imposed under the Canada IGA and FATCA, while ensuring that its account holders are impacted as little as possible. To this end, VersaBank has, as of July 1, 2014, implemented account opening procedures to identify accounts holders who may be U.S. Persons. VersaBank also completed a review of previously opened accounts to identify account holders who may be U.S. Persons. If you are identified as a U.S. Person, you may be asked to provide additional information. If you have any questions or concerns about your U.S. tax status, it is recommended that you consult a professional tax advisor.
Should you require additional information, you may find the following links helpful:
- Department of Finance Canada
- Canada Revenue Agency
- Canadian Bankers Association
- Canada-U.S. Intergovernmental Agreement on FATCA
- Internal Revenue Service
Similar to FATCA, the Common Reporting Standard for the Automatic Exchange of Information (“CRS”) is a new international standard of tax cooperation to combat tax evasion involving the use of offshore accounts. More than 100 jurisdictions, including Canada, are committed to implementing the CRS. On December 15, 2016, Part XIX was added to Canada’s Income Tax Act which incorporates CRS due diligence and reporting obligations into Canadian law. This legislation, together with its administration by the CRA, will allow the CRA to exchange financial account information with participating jurisdictions beginning in 2018.
In order to meet requirements imposed under the CRS, VersaBank has implemented new account opening procedures, effective July 1, 2017, to identify account holders who may be tax residents of a jurisdiction other than Canada or the United States (“non-resident account holder”) and to obtain specific information from such non-resident account holders. VersaBank will also be undertaking a review of previously opened accounts to identify non-resident account holders. If you are identified as a non-resident account holder, you may be asked to provide additional information. If you have any questions or concerns about your tax residency status, it is recommended that you consult a professional tax advisor.
For more information on the CRS, please visit the CRA website: