Posted in Uncategorized on February 19, 2014|
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The long-awaited agreement between Canada and the U.S. was made official on February 5, 2014. The signed intergovernmental agreement (IGA) will implement the Foreign Account Tax Compliance Act (FATCA).
Canada has signed the IGA under the Model 1 approach, which requires foreign financial institutions (FFI’s) to report FATCA information to their home country tax authority. In this case, FFI’s will report relevant information to the Canada Revenue Agency (CRA) who will then subsequently provide the information to the IRS, pursuant to the income tax treaty that is currently in place between the U.S. and Canada.
Canada is one of the many countries that have decided to come on board the FATCA train. Some notable countries that have previously signed an IGA with the U.S. include Switzerland, Germany, Italy, France, the United Kingdom and the Cayman Islands.
Despite the ongoing speculation, it is unlikely that there will be any further delays in the FATCA deadline, which currently stands as July 1, 2014. The IRS has also issued an updated version of Publication 5118, the “FATCA User Guide,” which details the online registration process for FFI’s.
If you as an individual hold a foreign bank account, it is important that you consult your tax adviser as the penalties for noncompliance can be significant.
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Check out the below table to learn what holidays people are celebrating around the world in February!
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Corney Versteden, LLM
Senior Tax Partner
HLB Van Daal & Partners
NV in Waalwijk, The Netherlands
One thing I learned over the years from being an international tax advisor is that the profession it is not just built on technical knowledge. Practical experience and knowing who to contact in another country can be equally important. Many of our clients are interested in the solution, not so much the theory behind it. Besides technical training, we spend a fair amount of our time and effort on getting to know our tax and audit colleagues within the HLB International network. Over the years I have met a lot of my HLB International collegues from all over the world.
I had the opportunity to meet 76 colleagues from 27 different European countries at the HLB European conference on January 16 and 17 in Vienna. I admit, we also drank a beer at the bar, but we spent a lot more time inside the conference rooms discussing different ways to serve our clients better. Ultimately, that is what it is all about. Is it not? I can tell you that very experienced people from different cultures and different backgrounds can come up with a lot of surprising ideas.
That Friday night I traveled to Milan with two of my fellow HLB International Tax Committee members to meet with our fellow two members for the weekend. The five of us needed to start planning the tax portion of the International Tax and Audit conference in Washington this July. To save time, we met during the weekend. You may be thinking, “Sure, you were in Milan for the weekend and worked?” I can assure you, we did work. We are not exactly the shopping kind of people. I don’t even do that at home, so why should I do that in Milan?
That Monday morning we met with the senior staff of HLB Noda to talk about all the issues that come up when running an international tax practice, and how we can help them and how they can help HLB International.
During the afternoon we attended a client event that is organized by HLB Noda. This is the new name of the HLB federation in Italy. The five of us presented on various tax issues that come up when a company goes abroad. The event was a success, just like all the events organized by them so far.
But, like many of my clients who feel that they live in hotels and airplanes, it is good to be back home with my wife and two boys.
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