Podcast
Questions and Answers
What information must Canadian financial institutions report to CRA for accounts held by US persons?
What information must Canadian financial institutions report to CRA for accounts held by US persons?
- Name, address, and US taxpayer identification number (correct)
- Bank account number, income, and assets
- Social security number, date of birth, and occupation
- Passport number, marital status, and education level
What is the consequence of Canadian financial institutions not complying with Part XVIII of the ITA?
What is the consequence of Canadian financial institutions not complying with Part XVIII of the ITA?
- 30% withholding tax under FATCA (correct)
- 10% withholding tax penalty
- 20% withholding tax penalty
- Account closure by CRA
What is the purpose of CRA reporting information to the IRS for accounts held by US persons?
What is the purpose of CRA reporting information to the IRS for accounts held by US persons?
- To share account holder's investment strategies
- To comply with international tax regulations (correct)
- To ensure Canadian financial institutions pay taxes in the US
- To provide details on account holder's citizenship
As a Dealing Representative, what should you familiarize yourself with regarding FATCA?
As a Dealing Representative, what should you familiarize yourself with regarding FATCA?
What responsibility may a Dealing Representative have concerning US persons?
What responsibility may a Dealing Representative have concerning US persons?
How do Canadian financial institutions avoid the punitive 30% withholding tax under FATCA?
How do Canadian financial institutions avoid the punitive 30% withholding tax under FATCA?
What is the protocol regarding accepting health cards from clients in Québec?
What is the protocol regarding accepting health cards from clients in Québec?
What is the appropriate action if you are unable to identify an individual when opening an account?
What is the appropriate action if you are unable to identify an individual when opening an account?
Which of the following positions in a foreign country classify individuals as politically exposed foreign persons?
Which of the following positions in a foreign country classify individuals as politically exposed foreign persons?
What action should be taken if a client is evasive or unwilling to provide adequate identification information?
What action should be taken if a client is evasive or unwilling to provide adequate identification information?
What change in identification requirements was introduced in June 2020?
What change in identification requirements was introduced in June 2020?
What is the status of health cards from Ontario, Manitoba, and PEI for identification purposes?
What is the status of health cards from Ontario, Manitoba, and PEI for identification purposes?
Which category was added to the identification requirements for Politically Exposed Foreign Persons in June 2020?
Which category was added to the identification requirements for Politically Exposed Foreign Persons in June 2020?
What should be done if a client volunteers their health card for identification purposes in Québec?
What should be done if a client volunteers their health card for identification purposes in Québec?
Which government body does a securities dealer report suspicious transactions to?
Which government body does a securities dealer report suspicious transactions to?
What is the minimum cash transaction amount that must be recorded as a large cash transaction record?
What is the minimum cash transaction amount that must be recorded as a large cash transaction record?
What is the consequence for a Canadian financial institution that fails to comply with FATCA?
What is the consequence for a Canadian financial institution that fails to comply with FATCA?
Which of the following records must be kept by securities dealers, portfolio managers, and investment counsellors?
Which of the following records must be kept by securities dealers, portfolio managers, and investment counsellors?
Under FATCA, what types of accounts must foreign financial institutions, including Canadian firms, report on?
Under FATCA, what types of accounts must foreign financial institutions, including Canadian firms, report on?
According to FATCA, who is considered a US person for US tax purposes?
According to FATCA, who is considered a US person for US tax purposes?
In which situation is a securities dealer required to confirm a client's identity?
In which situation is a securities dealer required to confirm a client's identity?
What motivated Canadian and US governments to sign an InterGovernmental Agreement (IGA) regarding FATCA?
What motivated Canadian and US governments to sign an InterGovernmental Agreement (IGA) regarding FATCA?
Which of the following documents can be used to identify an individual?
Which of the following documents can be used to identify an individual?
What is the maximum time limit within which records must be provided to FINTRAC upon request?
What is the maximum time limit within which records must be provided to FINTRAC upon request?
What is the purpose of Part XVIII of the Income Tax Act of Canada in relation to FATCA?
What is the purpose of Part XVIII of the Income Tax Act of Canada in relation to FATCA?
Which of the following is not a requirement for securities dealers, portfolio managers, and investment counsellors regarding record-keeping?
Which of the following is not a requirement for securities dealers, portfolio managers, and investment counsellors regarding record-keeping?
Why would a person with closer economic and social ties to Canada than the US not be considered a US resident according to the text?
Why would a person with closer economic and social ties to Canada than the US not be considered a US resident according to the text?
Why does FATCA impose a 30% withholding tax on certain US-source payments for non-compliant Canadian financial institutions?
Why does FATCA impose a 30% withholding tax on certain US-source payments for non-compliant Canadian financial institutions?
Which of the following is not a requirement for confirming a client's identity?
Which of the following is not a requirement for confirming a client's identity?
What is the primary role of Canadian mutual fund dealers under Part XVIII of the ITA?
What is the primary role of Canadian mutual fund dealers under Part XVIII of the ITA?
Which of the following is NOT considered personal information under PIPEDA?
Which of the following is NOT considered personal information under PIPEDA?
What is the intention of the National Do Not Call List (DNCL)?
What is the intention of the National Do Not Call List (DNCL)?
Which of the following is a factual information under PIPEDA?
Which of the following is a factual information under PIPEDA?
What does telemarketing refer to under the DNCL?
What does telemarketing refer to under the DNCL?
Which of the following is NOT a rule of PIPEDA regarding personal information?
Which of the following is NOT a rule of PIPEDA regarding personal information?
What happens if a person has registered their phone number on the DNCL?
What happens if a person has registered their phone number on the DNCL?
Which of the following is a subjective information under PIPEDA?
Which of the following is a subjective information under PIPEDA?
Who established the National Do Not Call List (DNCL) in Canada?
Who established the National Do Not Call List (DNCL) in Canada?
Study Notes
FATCA
- Canadian financial institutions must report information about accounts held by US persons to CRA, which will automatically report to the IRS.
- Institutions must report the following information: account holder's name, address, US taxpayer identification number, and certain financial information.
- Failure to comply with FATCA will result in a 30% withholding tax on certain US-source payments.
US Persons
- A person is a US person for US tax purposes if they are a US resident or a US citizen.
- However, a person with economic and social ties closer to Canada than the US is not generally considered a US resident.
Identifying Clients
- Confirm client's identity in certain circumstances: opening a non-registered account, large cash transaction, suspicious transaction, or when an individual is authorized to give instructions for an account.
- Acceptable identification documents include birth certificate, driver's license, passport, and more.
- Health cards from Ontario, Manitoba, and PEI are not allowed for identification purposes.
Politically Exposed Foreign Persons
- Individuals are considered politically exposed foreign persons if they or their immediate family hold certain positions in a foreign country, such as head of state, ambassador, or president of a state-owned company.
Record-Keeping
- Securities dealers, portfolio managers, and investment counsellors must keep records of large cash transactions, account opening records, client statements, and other designated records.
- Records must be kept in a way that they can be provided to FINTRAC within 30 days of a request.
FINTRAC
- Dealers must report suspicious transactions to FINTRAC.
- FINTRAC publishes guidelines for when to file reports and offers instructions for how to file them.
PIPEDA
- PIPEDA has rules governing what private sector organizations can do with "personal information".
- Personal information includes age, name, medical records, ID numbers, income, and more.
Do Not Call List (DNCL)
- The Canadian Radio-television and Telecommunications Commission (CRTC) established a National Do Not Call List (DNCL) to give consumers the choice about whether to receive telemarketing calls or not.
- Telemarketing refers to unsolicited telecommunications to sell or promote a product or service.
- If a person has registered a phone number on the DNCL, you are not permitted to call that person for telemarketing purposes unless they have given express permission.
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Description
Test your knowledge on the guidelines for reporting suspicious transactions to FINTRAC, including when to file reports and how to file them. Understand the record-keeping requirements for securities dealers, portfolio managers, and investment counsellors.
