The United States signed an intergovernmental agreement (IGA) with Canada on 5 February 2014 to implement the Foreign Account Tax Compliance Act (FATCA). In 2010, the U.S. passed the Foreign Account Tax Compliance Act, to target non-compliance by U.S. taxpayers using foreign accounts, and the provision has since become part of the global standard for promoting tax transparency. The United States has signed 22 IGAs and has 12 agreements in substance to date. The deal is consistent with Canada’s support for recent G-8 and G-20 commitments intended to fight tax evasion globally and to improve tax fairness.
The agreement will take effect in July, at which time Canadian financial institutions will be required to collect information on new accounts opened by US citizens, and report that information to Canadian tax authorities.
