FATCA

The Foreign Account Tax Compliance Act (FATCA) is United States (U.S.) legislation that was passed in 2010 in order to prevent U.S. taxpayers from using financial accounts outside the U.S. to evade taxes.

As a result of an agreement between Canada and the U.S., the law requires all Canadian financial institutions, including Zag Bank, to collect and report specific accounts held by U.S. persons to the U.S. Internal Revenue Service (IRS).  

The Foreign Account Tax Compliance Act (FATCA) is United States (U.S.) legislation that was passed in 2010 in order to prevent U.S. taxpayers from using financial accounts outside the U.S. to evade taxes.

As a result of an agreement between Canada and the U.S., the law requires all Canadian financial institutions, including Zag Bank, to collect and report specific accounts held by U.S. persons to the U.S. Internal Revenue Service (IRS).  

Zag Bank complies with FATCA.

FATCA took effect on July 1, 2014.

FATCA applies to all U.S. persons.  According to U.S. tax law, you are considered a U.S. person if you are:

  1. A citizen of the U.S. (including an individual born in the U.S. but living in another country who hasn’t renounced their U.S. citizenship); 
  2. A lawful resident of the U.S. including U.S. green card holders;
  3. A person that lives in the U.S.;
  4. A U.S. corporation, estate or trust.

You may also be considered a U.S. person if you spend a lot of time in the U.S. (for example, six months or more in a row annually). If you’re unsure whether or not you are considered a U.S. person for tax purposes, we suggest you speak to your tax advisor or visit the IRS website for more information: https://www.irs.gov/individuals/international-taxpayers .

Most likely, these regulations will not impact the majority of Zag Bank clients.  

In cases where we identify that an account that might be affected by these requirements (i.e. there is an indication that you or someone with an indirect interest in the account might be a U.S. person ), we may ask you for additional information or request that you fill in a Self-Certification form to confirm your tax status.

This form allows you to declare you are a U.S. person for tax purposes under FATCA . When you apply to open an account with Zag Bank and you answer “Yes” to the question “Are you a U.S. person?”, the Self-Certification form is automatically sent to you. The form may also be sent to you should your tax status change over time.

If you wish to change your tax status, simply email us at foreigntax@zagbank.ca.

Additional information and forms can also be found at the Internal Revenue Services (IRS) website: www.irs.gov .

For any questions about your specific situation you should speak with your tax advisor. For more general questions about FATCA, simply visit the Canada Revenue Agency (CRA) website: http://www.cra-arc.gc.ca/tx/nnrsdnts/nhncdrprtng/menu-eng.html

As you might expect, if you or your joint account holder is a U.S. person, then the entire account is considered a U.S. account.

At Zag, your privacy is of the utmost importance and is protected by law. To address privacy and regulatory concerns related to FATCA, in 2014 the Canadian government entered into an information sharing agreement with the U.S. government known as the Intergovernmental Agreement (IGA).   All Canadian financial institutions including Zag Bank have agreed to adhere to the IGA’s standard of strict compliance with Canadian privacy laws.

The following types of Zag accounts are not included under FATCA:

  • Zag RRSP Savings accounts
  • Zag Tax-Free Savings accounts
  • Zag RRSP GIC accounts
  • Zag Tax-Free GIC accounts