Submission to Finance Department on Implementation of FATCA in Canada

51 Pages Posted: 14 Mar 2014  

Allison Christians

McGill University - Faculty of Law

Arthur J. Cockfield

Queen's University - Faculty of Law

Date Written: March 10, 2014

Abstract

The United States enacted a tax reform in 2010 known as the Foreign Account Tax Compliance Act (FATCA), which will impose an extensive third-party monitoring and disclosure regime on financial institutions around the world in an effort to “smoke out” American tax cheats and expose their undeclared foreign assets to the U.S. Internal Revenue Service (IRS). The flow of information from Canadian financial institutions directly to the IRS that is required by FATCA would violate a number of laws in Canada. Accordingly, the United States has requested changes to these laws. The Canadian government now seeks to accommodate these requests in the form of an “intergovernmental agreement” (IGA) with the United States, which will be enacted into law as the Canada–United States Enhanced Tax Information Exchange Agreement Implementation Act (the Implementation Act) pursuant to a proposal released for comment by the Department of Finance. The Department of Finance invited public comments on these documents. We examined the proposed Implementation Act and the IGA and we find that they raise a number of serious issues ranging from likely constitutional violations to violations of international law. We submit these comments in the hope that they will help lawmakers and the public understand that FATCA, while intended to catch tax evaders, is poised instead to impose serious and unjustified harms on people who live around the world as non-resident U.S. citizens and green card holders, as well as their family members and business associates.

Keywords: FATCA, citizenship, privacy, rights, surveillance, financial, offshore, IGA, treaty, tax, reciprocity, tax policy, tax evasion, compliance, administration, global governance, international relations

JEL Classification: H11, H21, H87, F02, F50, F53, F59, Z13, E63, H2, K33, K34, N40, P45

Suggested Citation

Christians, Allison and Cockfield, Arthur J., Submission to Finance Department on Implementation of FATCA in Canada (March 10, 2014). Available at SSRN: https://ssrn.com/abstract=2407264 or http://dx.doi.org/10.2139/ssrn.2407264

Allison Christians (Contact Author)

McGill University - Faculty of Law ( email )

1001 Sherbrooke St. W
Montreal, Quebec H3A 1G5
Canada

Arthur Cockfield

Queen's University - Faculty of Law ( email )

Macdonald Hall
Kingston, Ontario K7L 3N6 K7L3N6
Canada

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