FATCA & CRS Compliance

The Facts on FATCA

Canada and the United States signed an inter-governmental agreement known as the Foreign Account Tax Compliance Act (FATCA) in order to combat tax evasion. This Act came into effect on July 1, 2014. Canadian financial institutions, like SCU, must identify and report their U.S. members to the Canada Revenue Agency (CRA).

Definition of a "U.S. person" for U.S. tax purposes

Generally, the features of a U.S. person are:

According to the CRA, "In Canada, your tax status is not generally determined by your citizenship(s). However, the U.S. taxes on the basis of both residency and citizenship. Since Canada has agreed to identify U.S. residents and U.S. citizens with certain financial accounts in Canada, your Canadian financial institution may ask whether you are a U.S. person, and may explain that the U.S. taxes on the basis of citizenship as well as residency".

The Facts on CRS

The Common Reporting Standard (CRS) is a new international reporting standard for automatic exchange of financial account information between tax administrations. The purpose of this new standard is to fight tax evasion and to promote voluntary compliance with tax laws.

Canada and close to a hundred other jurisdictions have agreed to commit to its implementation. As of July 2017, Canadian financial institutions, like SCU, must identify accounts held by members who are tax residents in countries other than Canada or the U.S. and report about these members to the Canada Revenue Agency (CRA).

Definition of a "Reportable Person" for CRS tax purposes:

How SCU is dealing with FATCA and CRS Legislation

SCU understands the objectives of these new legislations to identify potential individuals or entities involved in tax evasion. We are diligently reviewing FATCA and CRS regulations to determine the impact on our members while maintaining our high standards for privacy.

Frequently Asked Questions

What are "reportable accounts"?
"Reportable accounts" are individual and entity accounts held by:

Additional limitations apply.

How will you determine if I have "reportable accounts"?
As of July 1, 2017, all Canadian financial institutions, including SCU, are required to have new individual and business (entity) members declare their tax residency when opening a membership, and to provide documentation to support their declaration. Our existing members may be requested to complete a form declaring their tax residency based on certain criteria, or when a member has a change in circumstances. We will then review the information you provide against the applicable requirements to determine if your accounts are reportable.

In addition, please note that businesses with passive income will be required to complete tax residency for controlling persons.

What information is SCU required to report about its Reportable Accounts?

Do FATCA and CRS comply with privacy rules?
SCU takes member privacy seriously and complies with privacy rules in all jurisdictions. In addition, the Canada Revenue Agency (CRA) has committed to sharing CRS information only with jurisdictions that have appropriate safeguards and privacy protection in place.

I am not a U.S. or International person. What do these laws mean for me?
SCU is required to have all members, Canadians included, to declare their tax residency and provide supporting documentation when opening a membership. If you have an existing account and there is an indication that you may be either a U.S. or international person, SCU may ask you to complete a form declaring your tax residency and to provide additional documentation or information to support your declaration.

I am not a U.S. person but I have an account in U.S. dollars. Does this mean my accounts will be reported to the CRA?
No, the currency of an account has no impact on whether or not it is treated as a "reportable account."

What happens if I refuse to answer the questions or provide the requested documentation?
If you choose to not complete a Declaration of Tax Residence or provide supporting documentation, legislation requires us to treat your accounts as "reportable accounts".

Who can I contact with more questions?
You may want to consult with your personal tax advisor for additional clarification or visit the CRA or IRS websites for more information.