United States – Canada FATCA Intergovernmental Agreement released

The long-anticipated United States – Canada Intergovernmental agreement (IGA) was released on February 5, 2014.

The Foreign Account Tax Compliance Act (FATCA), enacted by the US Congress in 2010, requires foreign financial institutions to use certain due diligence procedures to identify US persons who have invested in either non-US financial accounts or non-US entities. The intent behind FATCA is to keep US persons from hiding income and assets overseas, as US persons are required to report to the Internal Revenue Service (IRS) on their worldwide income regardless of their residency. FATCA will start to become operational on July 1, 2014. The US Treasury has entered into intergovernmental agreements with many countries in order to alleviate some of the burdens associated with FATCA compliance.

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